2050                       2045         2035   2040Technology RoadmapSmart Grids
INTERNATIONAL ENERGY AGENCY    The International Energy Agency (IEA), an autonomous agency, was established in November 19...
ForewordCurrent trends in energy supply and use                                  This roadmap focuses on smart grids – the...
Table of contents    Foreword	                                                                                            ...
List of Figures1. Smarter electricity systems	                                                                          62...
Acknowledgements    This publication was prepared by the International     sections and George Arnold of the National Inst...
Key findings	The  development of smart grids is essential if          smart electricity infrastructure, while OECD   the ...
Introduction    There is a pressing need to accelerate the                                                 generation, sto...
These challenges must also be addressed with                  advocates and consumers, to develop tailoredregard to each r...
Figure 2. Smart grids can link                                         Purpose, process and    electricity system stakehol...
advocates, finance experts and government               The roadmap is organised into seven sections.institutions. In para...
Electricity system needs for today and the future     Box 1: Energy Technology Perspectives                       Over the...
Growth in demand is expected to vary between                   of variable generation technology. 2 This increaseregions a...
line rating special protection schemes, to manage                                                                        e...
to enable the existing power network to deal with     which is operating with very high reliability levels,the additional ...
Figure 6.  xample of a 24-hour electricity system demand curve               E               on several dates over the yea...
disturbances. When they spread over a wide area       solar power systems, will increase the amount ofof the grid, they ar...
Adequacy concerns introduced by the deployment            zz  onsumers are not adequately informed about                  ...
Smart grid deploymentSmart grid technologies                                               help system operators to unders...
cable or telephone), support data transmission         Distribution grid management     for deferred and real-time operati...
that large charging installation will provide power      smart appliances and distributed generation.13system ancillary se...
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
Iea technology roadmap smart grids
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Iea technology roadmap smart grids

  1. 1. 2050 2045 2035 2040Technology RoadmapSmart Grids
  2. 2. INTERNATIONAL ENERGY AGENCY The International Energy Agency (IEA), an autonomous agency, was established in November 1974. Its primary mandate was – and is – two-fold: to promote energy security amongst its member countries through collective response to physical disruptions in oil supply, and provide authoritative research and analysis on ways to ensure reliable, affordable and clean energy for its 28 membercountries and beyond. The IEA carries out a comprehensive programme of energy co-operation amongits member countries, each of which is obliged to hold oil stocks equivalent to 90 days of its net imports.The Agency’s aims include the following objectives:n Secure member countries’ access to reliable and ample supplies of all forms of energy; in particular,through maintaining effective emergency response capabilities in case of oil supply disruptions. n Promote sustainable energy policies that spur economic growth and environmental protection in a global context – particularly in terms of reducing greenhouse-gas emissions that contribute to climate change. n Improve transparency of international markets through collection and analysis of energy data. n Support global collaboration on energy technology to secure future energy supplies and mitigate their environmental impact, including through improved energy efficiency and development and deployment of low-carbon technologies. n Find solutions to global energy challenges through engagement and dialogue with non-member countries, industry, international organisations and other stakeholders. IEA member countries: Australia Austria Belgium Canada Czech Republic Denmark Finland France Germany Greece Hungary Ireland Italy Japan Korea (Republic of) Luxembourg Netherlands New Zealand Norway Poland Portugal Slovak Republic © OECD/IEA, 2011 Spain International Energy Agency Sweden 9 rue de la Fédération 75739 Paris Cedex 15, France Switzerland Turkey www.iea.org United Kingdom Please note that this publication United States is subject to specific restrictions that limit its use and distribution. The European Commission The terms and conditions are available also participates in online at www.iea.org/about/copyright.asp the work of the IEA.
  3. 3. ForewordCurrent trends in energy supply and use This roadmap focuses on smart grids – theare patently unsustainable – economically, infrastructure that enables the delivery of powerenvironmentally and socially. Without decisive from generation sources to end-uses to beaction, increased fossil fuel demand will heighten monitored and managed in real time. Smart gridsconcerns over the security of supplies and energy- are required to enable the use of a range of low-related emissions of carbon dioxide (CO2) will more carbon technologies, such as variable renewablethan double by 2050. We can and must change resources and electric vehicles, and to addressour current path, but this will take an energy current concerns with the electricity systemrevolution and low-carbon energy technologies infrastructure, such as meeting peak demand withwill have a crucial role to play. Energy efficiency, an ageing infrastructure. Unlike most other low-many types of renewable energy, carbon carbon energy technologies, smart grids mustcapture and storage, nuclear power and new be deployed in both existing systems (which intransport technologies will all require widespread some cases are over 40 years old) as well as withindeployment if we are to reach our greenhouse-gas totally new systems. Smart grid technologiesemission goals. Every major country and sector must also be installed with minimum disruptionof the economy must be involved. The task is also to the daily operation of the electricity system.urgent if we are to make sure that investment These challenges do not detract, however, fromdecisions taken now do not saddle us with the opportunity to gain significant benefits fromsub‑optimal technologies in the long term. developing and deploying smart grids.There is a growing awareness of the urgent need Nevertheless, significant barriers must beto turn political statements and analytical work overcome in order to deploy smart grids at theinto concrete action. To spark this movement, at scale they are needed. Governments need tothe request of the G8, the International Energy establish clear and consistent policies, regulationsAgency (IEA) is developing a series of roadmaps and plans for electricity systems that will allowfor some of the most important technologies. innovative investment in smart grids. It will also beThese roadmaps provide solid analytical footing vital to gain greater public engagement, and thisthat enables the international community to move will be helped educating all relevant stakeholdersforward on specific technologies. Each roadmap – but especially customers and consumerdevelops a growth path for a particular technology advocates – about the need for smart grids andfrom today to 2050, and identifies technology, the benefits they offer. Achieving the vision offinancing, policy and public engagement smartening the grid between now and 2050milestones that need to be achieved to realise the requires governments, research organisations,technology’s full potential. Roadmaps also include industry, the financial sector and internationala special focus on technology development and organisations to work together. This roadmapdiffusion to emerging economies. International sets out specific steps they need to take over thecollaboration will be critical to achieve these goals. coming years to achieve milestones that will allow smart grids to deliver a clean energy future.To date, much of the of low-carbon technologyanalysis in the energy sector has focused on Nobuo Tanakapower generation and end-use technologies. Executive Director, IEAERRATAFigure 4, page 11: the values for Africa and Central South America in 2050 have been corrected to 25% and 18% respectively.Page 20: the following paragraph was inserted under the heading “Smart grid demonstration and deployment efforts” following thesecond paragraph and preceding the third paragraph:The Telegestore project, launched in 2001 by ENEL Distribuzione S.p.A. (i.e. prior to the current smart grids stimulus funding) addressesmany of these issues. The project installed 33 million smart meters (including system hardware and software architecture) and automated100 000 distribution substations, while also improving management of the operating workforce and optimising asset management policiesand network investments. The project has resulted in fewer service interruptions, and its EUR 2.1 billion investment has led to actual costsavings of more than EUR 500 million per year. Today an active small and medium scale industry is developing technologies for smart gridsand ENEL is continually enhancing the system by introducing new features, technologies and flexibility. The project clearly demonstrates thevalue of a large-scale, integrated deployment of smart grid technologies to solve existing problems and plan for future needs.Page 21: A row has been added to Table 5 (Italy). This roadmap was prepared in April 2011. It was drafted by the International Energy Agency’s Energy Technology Policy Division. This paper reflects the views of the International Energy Agency (IEA) Secretariat, but does not necessarily reflect those of IEA member countries. For further information, please contact the author at: david.elzinga@iea.org. Foreword 1
  4. 4. Table of contents Foreword 1 Table of Contents 2 Acknowledgements 4 Key Findings 5 Introduction 6 What are smart grids? 6 Rationale for smart grid technology 6 Purpose, process and structure of the roadmap 8 Electricity System Needs for Today and the Future 10 Future demand and supply 10 Electricity system considerations 13 Electricity reliability 14 Smart Grid Deployment 17 Smart grid technologies 17 Smart grid demonstration and deployment efforts 20 Tailoring smart grids to developing countries and emerging economies 22 Status of electricity system markets and regulation 23 Vision for Smart Grid Deployment to 2050 24 Regional analysis and impacts for deployment 24 Quantification of peak demand and the impact of smart grids 24 Regional scenarios for deployment to 2050 26 Smart grid CO2 emissions reduction estimates to 2050 27 Estimating smart grid investment costs and operating savings 27 Technology Development: Actions and Milestones 30 Development and demonstration 30 Standards 31 Policy and Regulatory Framework: Actions and Milestones 34 Generation, transmission and distribution 34 Smart grid, smart consumer policies 36 Building consensus on smart grid deployment 40 International Collaboration 41 Expand existing international collaboration efforts 41 Create new collaborations with other electricity system technology areas 41 Smart grid collaboration and developing countries 42 Conclusion: Near-term Roadmap Actions for Stakeholders 43 Summary of actions led by stakeholders 43 Glossary 45 References 47 List of Relevant Websites 482 Technology Roadmaps  Smart grids
  5. 5. List of Figures1. Smarter electricity systems 62. Smart grids can link electricity system stakeholder objectives 83. Electricity consumption growth 2007-50 (ETP BLUE Map Scenario) 104. Portion of variable generation of electricity by region (ETP BLUE Map Scenario) 115. Deployment of electric vehicles and plug-in hybrid electric vehicles 126. Example of a 24-hour electricity system demand curve on several dates over the year 147. Transmission links between Nordic countries 158. Smart grid technology areas 179. Example of developing country rural electrification pathway 2210. Vertically integrated and unbundled electricity markets 2311. Regional smart grids analysis structure 2412. OECD North America EV deployment impact on peak demand 2513. Regional CO2 emissions reduction from smart grid deployment 2814. Smart grid product providers 33List of Tables1. Characteristics of smart grids 72. Workshop contributions to the Smart Grids Roadmap 83. Smart grid technologies 194. Maturity levels and development trends of smart grid technologies 205. Select national smart grid deployment efforts 216. Modelling scenarios for SGMIN and SGMAX 257. Increase in electricity demand over 2010 values for SGMIN and SGMAX scenarios 268. Increase in peak demand over 2010 values for SGMIN and SGMAX scenarios 269. Electricity sector focus for ECG IAs 42List of Boxes1. Energy Technology Perspectives scenario descriptions 102. Electricity system flexibility 153. Smart communities 22 Table of contents 3
  6. 6. Acknowledgements This publication was prepared by the International sections and George Arnold of the National Institute Energy Agency’s Energy Technology Policy of Standards and Technology (NIST) contributed Division. Bo Diczfalusy, Director of the Directorate to the section on standards. The roadmap was of Sustainable Energy Policy and Technology, and edited by Andrew Johnston of Language Aid. Muriel Peter Taylor, Head of the Energy Technology Policy Custodio and Bertrand Sadin of the IEA provided Division, provided important guidance and input. layout and graphical design support. Tom Kerr, co-ordinator of the Energy Technology Roadmaps project, provided invaluable leadership This work was guided by the IEA Committee on and inspiration throughout the development of Energy Research and Technology. Its members the roadmap. David Elzinga was the lead author hosted one of the roadmap workshops and for this roadmap. Steve Heinen also provided provided important reviews and comments that significant input and support. Many other IEA helped to improve the document. A number of IEA colleagues have provided important contributions, Implementing Agreement members, as part of the in particular Seul-Ki Kim (with the support of the Electricity Co-ordination Group, provided valuable Korean Ministry of Knowledge and Economy), comments and suggestions. We want to thank Yuichi Ikeda, Grayson Heffner, Hugo Chandler, the Norwegian Ministry of Petroleum and Energy Marilyn Smith, Uwe Remme, Lew Fulton, Hiroyuki and the Japanese Ministry of Economy, Trade and Kaneko, Stefanie Held, Mary Harries Magnusson Industry for support and guidance to the roadmap. and Catherine Smith. Finally, this roadmap would not be effective The volunteers of the smart grids roadmaps without all of the comments and support advisory committee have provided guidance over received from the industry, government and non- the course of its development: Guido Bartels government experts who attended meetings, of IBM; David Mohler of Duke Energy and the reviewed and commented on drafts, and provided members of the e8 technology group on smart overall guidance and support. The authors wish to grids; Joris Knigge of Enexis; Laurent Schmitt of thank all of those who commented who cannot be Alstom Power; Michele de Nigris of Ricerca sul named individually. Sistema Energetico and the Electricity Networks For more information on this document, contact: Analysis and R&D IEA Implementing Agreement; Hans Nilsson of the Demand Side Management IEA David Elzinga, IEA Secretariat Implementing Agreement; Henriette Nesheim of Tel. +33 1 40 57 66 93 the Norwegian Ministry of Petroleum and Energy; Email: david.elzinga@iea.org Eric Lightner of the US Department of Energy; and Bartosz Wojszczyk of General Electric. David Steve Heinen, IEA Secretariat Beauvais of Natural Resources Canada contributed Tel. +33 1 40 57 66 82 to the development of the smart grid technologies Email: steve.heinen@iea.org4 Technology Roadmaps  Smart grids
  7. 7. Key findings The development of smart grids is essential if smart electricity infrastructure, while OECD the global community is to achieve shared goals countries are already investing in incremental for energy security, economic development improvements to existing grids and small-scale and climate change mitigation. Smart grids pilot projects. enable increased demand response and energy efficiency, integration of variable  Current regulatory and market systems can renewable energy resources and electric vehicle hinder demonstration and deployment of smart recharging services, while reducing peak grids. Regulatory and market models – such demand and stabilising the electricity system. as those addressing system investment, prices and customer participation – must evolve The physical and institutional complexity of as technologies offer new options over the electricity systems makes it unlikely that the course of long-term, incremental smart grid market alone will implement smart grids on the deployment. scale that is needed. Governments, the private sector, and consumer and environmental  Regulators and consumer advocates need advocacy groups must work together to define to engage in system demonstration and electricity system needs and determine smart deployment to ensure that customers benefit grid solutions. from smart grids. Building awareness and seeking consensus on the value of smart Rapid expansion of smart grids is hindered grids must be a priority, with energy utilities by a tendency on the part of governments and regulators having a key role in justifying to shy away from taking ownership of investments. and responsibility for actively evolving or developing new electricity system regulations,  Greater international collaboration is needed policy and technology. These trends have led to to share experiences with pilot programmes, a diffusion of roles and responsibilities among to leverage national investments in technology government and industry actors, and have development, and to develop common smart reduced overall expenditure on technology grid technology standards that optimise development and demonstration, and policy and accelerate technology development development. The result has been slow and deployment while reducing costs for all progress on a number of regional smart grid stakeholders. pilot projects that are needed.  Peak demand will increase between 2010 and The “smartening” of grids is already happening; 2050 in all regions. Smart grids deployment it is not a one-time event. However, large-scale, could reduce projected peak demand increases system-wide demonstrations are urgently by 13% to 24% over this frame for the four needed to determine solutions that can be regions analysed in this roadmap. deployed at full scale, integrating the full set of  Smart grids can provide significant benefits smart grid technologies with existing electricity to developing countries. Capacity building, infrastructure. targeted analysis and roadmaps – created Large-scale pilot projects are urgently collaboratively with developed and developing needed in all world regions to test various countries – are required to determine specific business models and then adapt them to the needs and solutions in technology and local circumstances. Countries and regions regulation. will use smart grids for different purposes; emerging economies may leapfrog directly to Key findings 5
  8. 8. Introduction There is a pressing need to accelerate the generation, storage and end-users.1 While development of low-carbon energy technologies many regions have already begun to “smarten” in order to address the global challenges of their electricity system, all regions will require energy security, climate change and economic significant additional investment and planning growth. Smart grids are particularly important to achieve a smarter grid. Smart grids are an as they enable several other low-carbon energy evolving set of technologies that will be deployed technologies, including electric vehicles, variable at different rates in a variety of settings around renewable energy sources and demand response. the world, depending on local commercial This roadmap provides a consensus view on the attractiveness, compatibility with existing current status of smart grid technologies, and maps technologies, regulatory developments and out a global path for expanded use of smart grids, investment frameworks. Figure 1 demonstrates the together with milestones and recommendations for evolutionary character of smart grids. action for technology and policy development. Rationale for smart grid What are smart grids? technology A smart grid is an electricity network that uses digital and other advanced technologies to The world’s electricity systems face a number monitor and manage the transport of electricity of challenges, including ageing infrastructure, from all generation sources to meet the varying continued growth in demand, the integration of electricity demands of end-users. Smart grids increasing numbers of variable renewable energy co-ordinate the needs and capabilities of all sources and electric vehicles, the need to improve generators, grid operators, end-users and the security of supply and the need to lower carbon electricity market stakeholders to operate all parts emissions. Smart grid technologies offer ways not of the system as efficiently as possible, minimising just to meet these challenges but also to develop a costs and environmental impacts while maximising cleaner energy supply that is more energy efficient, system reliability, resilience and stability. more affordable and more sustainable. For the purposes of this roadmap, smart grids include electricity networks (transmission 1 S mart grid concepts can be applied to a range of commodity and distribution systems) and interfaces with infrastructures, including water, gas, electricity and hydrogen. This roadmap focuses solely on electricity system concepts. Figure 1. Smarter electricity systems Past Present Future Transmission Distribution Transmission control centre control centre control centre System operator Distribution Energy control centre service provider Industrial Industrial Industrial customer customer customer Electric vehicles Energy Substation Substation Commercial Substation Substation Commercial storage Substation Substation Commercial customer customer customer High-temperature superconductor Storage Residential Residential Residential customer customer customer Electrical infrastructure Communications Source: Unless otherwise indicated, all material derives from IEA data and analysis. KEY POINT: The “smartening” of the electricity system is an evolutionary process, not a one-time event.6 Technology Roadmaps  Smart grids
  9. 9. These challenges must also be addressed with advocates and consumers, to develop tailoredregard to each region’s unique technical, financial technical, financial and regulatory solutions thatand commercial regulatory environment. Given the enable the potential of smart grids (Figure 2).highly regulated nature of the electricity system,proponents of smart grids must ensure that they The main characteristics of smart grids areengage with all stakeholders, including equipment explained in Table 1.manufacturers, system operators, consumerTable 1. Characteristics of smart gridsCharacteristic Description Consumers help balance supply and demand, and ensure reliability by modifyingEnables informed the way they use and purchase electricity. These modifications come as a result ofparticipation by consumers having choices that motivate different purchasing patterns and behaviour.customers These choices involve new technologies, new information about their electricity use, and new forms of electricity pricing and incentives. A smart grid accommodates not only large, centralised power plants, but also theAccommodates all growing array of customer-sited distributed energy resources. Integration of thesegeneration and resources – including renewables, small-scale combined heat and power, and energystorage options storage – will increase rapidly all along the value chain, from suppliers to marketers to customers. Correctly designed and operated markets efficiently create an opportunity forEnables new consumers to choose among competing services. Some of the independent gridproducts, services variables that must be explicitly managed are energy, capacity, location, time, rate ofand markets change and quality. Markets can play a major role in the management of these variables. Regulators, owners/operators and consumers need the flexibility to modify the rules of business to suit operating and market conditions. Not all commercial enterprises, and certainly not all residential customers, need theProvides the power same quality of power. A smart grid supplies varying grades (and prices) of power.quality for the range The cost of premium power-quality features can be included in the electrical serviceof needs contract. Advanced control methods monitor essential components, enabling rapid diagnosis and solutions to events that impact power quality, such as lightning, switching surges, line faults and harmonic sources. A smart grid applies the latest technologies to optimise the use of its assets. For example, optimised capacity can be attainable with dynamic ratings, which allowOptimises asset assets to be used at greater loads by continuously sensing and rating their capacities.utilisation and Maintenance efficiency can be optimised with condition-based maintenance, whichoperating efficiency signals the need for equipment maintenance at precisely the right time. System-control devices can be adjusted to reduce losses and eliminate congestion. Operating efficiency increases when selecting the least-cost energy-delivery system available through these types of system-control devices.Provides resiliency to Resiliency refers to the ability of a system to react to unexpected events by isolatingdisturbances, attacks problematic elements while the rest of the system is restored to normal operation. Theseand natural disasters self-healing actions result in reduced interruption of service to consumers and help service providers better manage the delivery infrastructure.Source: Adapted from DOE, 2009. Introduction 7
  10. 10. Figure 2. Smart grids can link Purpose, process and electricity system stakeholder objectives structure of the roadmap To provide guidance to government and industry stakeholders on the technology pathways needed to achieve energy security, economic growth and environmental goals, the IEA is developing a series of global low-carbon energy roadmaps covering a range of technologies. The roadmaps are guided Regulatory by the IEA Energy Technology Perspectives BLUE Map Societal and policy Scenario, which aims to achieve a 50% reduction in energy-related CO2 emissions by 2050. Each roadmap represents international consensus on milestones for technology development, legal and regulatory needs, investment requirements, public Financial Technology engagement and outreach, and international collaboration. The Smart Grid Roadmap aims to: zz ncrease understanding among a range of I stakeholders of the nature, function, costs and benefits of smart grids. zz dentify the most important actions required to I KEY POINT: Smart grids provide develop smart grid technologies and policies that an opportunity to link societal, financial, help to attain global energy and climate goals. technology and regulatory and policy objectives. zz evelop pathways to follow and milestones to D target based on regional conditions. The roadmap was compiled with the help of contributions from a wide range of interested parties, including electricity utilities, regulators, technology and solution providers, consumer Table 2. Workshop contributions to the Smart Grids Roadmap Date Location Event Workshop topic Electricity Networks: A Key Enabler of 28 April 2010 Paris ENARD/IEA Joint Workshop Sustainable Energy Policy Joint GIVAR/Smart Grid Defining Smart Grid Technologies and 20-21 May 2010 Paris Roadmap Workshop RDD needs Role of Government and Private Sector 8-9 June 2010 Paris CERT Meeting in Smart Grid RDD 23-24 September 2010 Washington, DC GridWise Global Forum Smart Grid – Smart Customer Policy 28-29 September 2010 Madrid ENARD/IEA Joint Workshop Financing the Smart Grid Jeju Island, Developing Country and Emerging 8-9 November 2010 Korea Smart Grid Week Korea Economy Smart Grid Perspectives Notes: ENARD refers to the IEA implementing agreement on Electricity Networks Analysis, RD, (www.iea-enard.org). The ENARD/IEA workshops are part of the implementing agreement work plan and, although highly complementary, not directly tied to the smart grid roadmap initiative. The IEA Grid Integration of Variable Renewables (GIVAR) project is a multi-year initiative that is assessing and quantifying approaches to large-scale deployment of variable renewable generation technologies. CERT refers to the IEA Committee on Energy Research and Technology.8 Technology Roadmaps  Smart grids
  11. 11. advocates, finance experts and government The roadmap is organised into seven sections.institutions. In parallel with its analysis and The first looks at the challenges facing grids todaymodelling, the Smart Grid Roadmap team and the benefits that smart grids offer, includinghas hosted and participated in several expert electricity reliability. The second describes theworkshops (Table 2). current deployment status of smart grids, along with smart grid costs and savings and marketThis roadmap does not attempt to cover every and regulatory considerations. The third sectionaspect of smart grids and should be regarded as a outlines a vision for smart grid deployment towork in progress. As global analysis improves, new 2050 based on the Energy Technology Perspectivesdata will provide the basis for updated scenarios and 2010 (ETP 2010) BLUE Map Scenario, including anassumptions. More important, as the technology, analysis of regional needs. The fourth and fifthmarket and regulatory environments evolve, sections examine smart grid technologies andadditional tasks will come to light. The broad nature policies, and propose actions and milestones forof smart grids requires significant collaboration their development and implementation. The sixthwith other technology areas, including transport section discusses current and future internationalelectrification, energy storage, generation and collaboration, while the seventh section presentsend-use. The roadmap provides links to further an action plan and identifies the next steps thatbackground information and reading. need to be taken. Introduction 9
  12. 12. Electricity system needs for today and the future Box 1: Energy Technology Perspectives Over the last few decades, generation and network scenario descriptions technology deployment, market and regulatory structures, and the volume and use of electricity have changed significantly. This transformation The ETP BLUE Map Scenario aims to ensure has largely been managed successfully, but ageing that global energy-related CO2 emissions are infrastructures mean that further changes could reduced to half their current levels by 2050. affect system stability, reliability and security. This scenario examines ways in which the Smart grid technologies provide a range of introduction of existing and new low-carbon solutions that can be tailored to the specific needs technologies might achieve this at least of each region. The primary global system trends cost, while also bringing energy security and the role of smart grids are illustrated in the benefits in terms of reduced dependence following sections using the Energy Technology on oil and gas, and health benefits as air Perspectives (ETP) Baseline and BLUE Map Scenarios pollutant emissions are reduced. The BLUE developed by the IEA to estimate future technology Map Scenario is consistent with a long-term deployment and demand (Box 1). global rise in temperatures of 2oC to 3oC, but only if the reduction in energy-related CO2 emissions is combined with deep cuts Future demand and supply in other greenhouse-gas emissions. The Baseline Scenario considers the business-as- Increased consumption usual case, not reducing emission levels to of electricity any predetermined goal by 2050. The BLUE Map and Baseline Scenarios are based on Electricity is the fastest-growing component of total the same macroeconomic assumptions. global energy demand, with consumption expected to increase by over 150% under the ETP 2010 Baseline Scenario and over 115% between 2007 and 2050 under the BLUE Map Scenario (IEA, 2010). Figure 3. Electricity consumption growth 2007-50 (BLUE Map Scenario) 600% 500% 400% 300% 200% 100% 0% OECD North OECD OECD Transition China India Other Africa Central and Middle Global America Europe Pacific economies developing Asia South America East average Source: IEA, 2010. KEY POINT: Emerging economies will need to use smart grids to efficiently meet rapidly growing electricity demand.10 Technology Roadmaps  Smart grids
  13. 13. Growth in demand is expected to vary between of variable generation technology. 2 This increaseregions as OECD member countries experience is expected to accelerate in the future, with allmuch more modest increases than emerging regions incorporating greater amounts of variableeconomies and developing countries (Figure 3). In generation into their electricity systems (FigureOECD countries, where modest growth rates are 4). As penetration rates of variable generationbased on high levels of current demand, smart grid increase over levels of 15% to 20%, and dependingtechnologies can provide considerable benefits on the electricity system in question, it canby reducing transmission and distribution losses, become increasingly difficult to ensure the reliableand optimising the use of existing infrastructure. and stable management of electricity systemsIn developing regions with high growth, smart relying solely on conventional grid architecturesgrid technologies can be incorporated in new and limited flexibility. Smart grids will supportinfrastructure, offering better market-function greater deployment of variable generationcapabilities and more efficient operation. In all technologies by providing operators with real-regions, smart grid technologies could increase time system information that enables them tothe efficiency of the supply system and help manage generation, demand and power quality,reduce demand by providing consumers with the thus increasing system flexibility and maintaininginformation they need to use less energy or use it stability and balance.more efficiently. There are some good examples of successfulDeployment of variable approaches to integrating variable resources. Ireland’s transmission system operator, EirGrid, isgeneration technology deploying smart grid technologies, including high- temperature, low-sag conductors and dynamicEfforts to reduce CO2 emissions related toelectricity generation, and to reduce fuel imports, 2 V ariable generation technologies produce electricity that ishave led to a significant increase in the deployment dependent on climatic or other conditions, meaning there is no guarantee that it can be dispatched as needed. This includes electricity generation from wind, photovoltaic, run-of-river hydro, combined heat and power, and tidal technologies.Figure 4. ortion of variable generation of electricity P by region (BLUE Map Scenario)30% 201025% 205020%15%10% 5% 0% OECD North OECD OECD Transition China India Other Africa Central and Middle America Europe Pacific economies developing Asia South America EastSource: IEA, 2010. KEY POINT: All regions will need smart grids to enable the effective integration of significantly higher amounts of variable resources to their electricity grids. Electricity system needs for today and the future 11
  14. 14. line rating special protection schemes, to manage electricity consumption by 2050 because of a the high proportion of wind energy on its system significant increase in electric vehicles (EV) and and maximise infrastructure effectiveness. The plug-in hybrid electric vehicles (PHEV) (Figure 5). operation of the system is being improved through If vehicle charging is not managed intelligently, state-of-the-art modelling and decision support it could increase peak loading on the electricity tools that provide real-time system stability analysis, infrastructure, adding to current peak demands wind farm dispatch capability and improved wind found in the residential and service sectors, and forecasting, and contingency analysis. System requiring major infrastructure investment to avoid flexibility and smart grid approaches are estimated supply failure. Smart grid technology can enable to facilitate real-time penetrations of wind up to charging to be carried out more strategically, 75% by 2020 (EirGrid, 2010). when demand is low, making use of both low-cost generation and extra system capacity, or when In Spain, Red Eléctrica has established a Control the production of electricity from renewable Centre of Renewable Energies (CECRE), a sources is high. Over the long term, smart grid worldwide pioneering initiative to monitor and technology could also enable electric vehicles to control these variable renewable energy resources. feed electricity stored in their batteries back into CECRE allows the maximum amount of production the system when needed.3 from renewable energy sources, especially wind energy, to be integrated into the power system In the Netherlands, the collaborative Mobile under secure conditions and is an operation Smart Grid project lead by the distribution utility unit integrated into the Power Control Centre. Enexis is establishing a network of electric car With CECRE, Spain has become the first country recharging sites and is using smart informartion worldwide to have a control centre for all wind and communication technology (ICT) applications farms over 10 MW. 3 T he ownership strategy of the vehicle battery will have a Electrification of transport significant impact on whether using vehicle batteries for grid storage is realistic, as this may reduce the life/reliability of vehicle batteries for not much financial return for the vehicle owner. The BLUE Map Scenario estimates that the Battery switching technology and leasing models may facilitate transport sector will make up 10% of overall the use of vehicle batteries for grid storage. Figure 5. Deployment of electric vehicles and plug-in hybrid electric vehicles 120 EVs All other PLDV sales (millions per year) 7 India 6 100 5 China 4 OECD Pacific 80 3 OECD Europe Passenger LDV sales (millions per year) 2 OECD 1 North America 60 0 20 20 0 18 20 9 14 20 6 15 12 13 17 11 1 1 1 20 20 20 20 20 20 20 20 PHEVs All other 40 India China OECD Pacific 20 OECD Europe OECD 0 North America 2010 2015 2020 2025 2030 2035 2040 2045 2050 Source: IEA, 2009. KEY POINT: Major economies with large personal vehicle sales will need smart grids to enable the effective integration of electric vehicles to their electricity grids.12 Technology Roadmaps  Smart grids
  15. 15. to enable the existing power network to deal with which is operating with very high reliability levels,the additional power demand. Working together and is now focusing on its distribution networks.with other network operators, energy companies, One example is in Yokahama City, where a large-software and hardware providers, universities scale energy management project is using bothand other research institutes, the project should new and existing houses in urban areas to assessresult in simple solutions for charging and paying the effects of energy consumption on distributionautomatically (Boots et al., 2010).4 infrastructure. 5 In the United States, as part of a broad range of smart grid investments, significant effort is being devoted to deploying phasorElectricity system measurement units on the transmission system, providing increased information for more reliableconsiderations operation of ageing infrastructure.6Ageing infrastructure Peak demandThe electrification of developed countries has Demand for electricity varies throughout the dayoccurred over the last 100 years; continued and across seasons (Figure 6). Electricity systeminvestment is needed to maintain reliability and infrastructure is designed to meet the highestquality of power. As demand grows and changes level of demand, so during non-peak times the(e.g. through deployment of electric vehicles), and system is typically underutilised. Building thedistributed generation becomes more widespread, system to satisfy occasional peak demand requiresageing distribution and transmission infrastructure investments in capacity that would not be neededwill need to be replaced and updated, and if the demand curve were flatter. Smart grids cannew technologies will need to be deployed. reduce peak demand by providing information andUnfortunately, in many regions, the necessary incentives to consumers to enable them to shifttechnology investment is hindered by existing consumption away from periods of peak demand.market and regulatory structures, which oftenhave long approval processes and do not capture Demand response in the electricity system – thethe benefits of new, innovative technologies. mechanism by which end-users (at the industrial,Smart grid technologies provide an opportunity to service or residential sector level) alter consumptionmaximise the use of existing infrastructure through in response to price or other signals – can bothbetter monitoring and management, while new reduce peak demand, but also provide systeminfrastructure can be more strategically deployed. flexibility, enabling the deployment of variable generation technologies. Reducing peak demandRapidly growing economies like China have is likely to be the first priority, because demand atdifferent smart grid infrastructure needs from a system level is relatively predictable and rampsthose of OECD countries. China’s response to up and down slowly compared with variableits high growth in demand will give it newer generation. As demand response technologydistribution and transmission infrastructure than develops and human interactions are betterthe other three regions examined in detail in this understood, the availability, volume and responseroadmap (OECD Europe, OECD North America time of the demand-side resource will provideand OECD Pacific). In the Pacific region, recent the flexibility necessary to respond to both peakinvestments in transmission have resulted in demand and variable generation needs.newer infrastructure than that in Europe andNorth America. OECD Europe has the highest The management of peak demand can enableproportion of ageing transmission and distribution better system planning throughout the entirelines, but North America has the largest number electricity system, increasing options for new loadsof lines and the largest number that are ageing such as electric vehicles, for storage deployment– especially at the transmission level. This is an and for generation technologies. These benefits areimportant consideration given the changes in essential for new systems where demand growthgeneration and consumption in the IEA scenarios is very high, and for existing and ageing systemsup to 2050, and the need to deploy smart grids that need to maintain existing and integrate newstrategically. In recent years Japan has invested technologies.significantly in its transmission infrastructure, 5 www.meti.go.jp/english/press/data/20100811_01.html4 www.mobilesmartgrid.eu 6 www.naspi.org/ Electricity system needs for today and the future 13
  16. 16. Figure 6. xample of a 24-hour electricity system demand curve E on several dates over the year 30 000 25 000 20 000 08 Jul. 10 08 Jan. 10 15 000 08 Apr. 10 08 Oct. 10 10 000 5 000 MW 0 0 4 8 12 16 20 24 Time of day Source: Data from Independent Electricity System Operator, Ontario, Canada. 7 KEY POINT: The demand for electricity varies throughout the day and across seasons; smart grids can reduce these peaks and optimise system operation. PowerCentsDC was an advanced meter pilot 7 defines the reliability of the interconnected bulk programme in Washington DC for 850 residential power system in terms of two basic and functional customers that ran over two summers and one aspects: adequacy and security. winter from July 2008 to October 2009. The programme analysis found that customer response Adequacy is seen by NERC as the ability of the bulk to three different residential pricing options power system to supply the aggregate electrical contributed to reducing peak demand, ranging demand and energy requirements of its customers from 4% to 34% in the summer and 2% to 13% at all times, taking into account scheduled and in the winter. These results indicate that different reasonably expected unscheduled outages of price structures enabled by smart grids can reduce system elements. System operators are expected peak demand. 8 to take “controlled” actions or procedures to maintain a continual balance between supply and demand within a balancing area. Actions include: Electricity reliability zz Public appeals to reduce demand. Growing electricity consumption and recent system zz Interruptible demand – customer demand that, failures have focused attention on the role that smart in accordance with contractual arrangements, grids can play in increasing electricity reliability – can be interrupted by direct control of the especially by increasing system flexibility. The North system operator or by action of the customer at American Electric Reliability Corporation (NERC)9 the direct request of the system operator. zz Voltage reductions – sometimes as much as 5. 7 www.ieso.ca/imoweb/marketdata/marketSummary.asp zz Rotating blackouts. 8 www.powercentsdc.org/ Security, in NERC’s definition, includes all other 9 N ERC’s mission is to improve the reliability and security of the bulk power system in the United States, Canada and part of Mexico. system disturbances that result in the unplanned The organisation aims to do that not only by enforcing compliance and/or uncontrolled interruption of customer with mandatory Reliability Standards, but also by acting as a “force for good” – a catalyst for positive change whose role demand, regardless of cause. When these includes shedding light on system weaknesses, helping industry interruptions are contained within a localised area, participants operate and plan to the highest possible level, and they are considered unplanned interruptions or communicating Examples of Excellence throughout the industry. 14 Technology Roadmaps  Smart grids
  17. 17. disturbances. When they spread over a wide area solar power systems, will increase the amount ofof the grid, they are referred to as “cascading generation capability on the system. Smart gridsblackouts” – the uncontrolled successive loss of enable improved, lower-cost integration of thesesystem elements triggered by an incident at any and other variable technologies that may requirelocation. Cascading results in widespread electric different electricity system operation protocols.service interruption that cannot be preventedfrom spreading sequentially beyond an area Figure 7. ransmission links between Tpredetermined by studies.10 Nordic countriesSystem adequacyThe considerations for meeting the needs ofelectricity consumers are significantly differentfrom those for other energy commodities. First,large-scale electricity storage is available onlyin a few regions that have significant reservoirhydro resources. Second, electricity is tradedon a regional rather than on a global basis. It isin this context that electricity production andconsumption must be continually monitoredand controlled. Smart grid technologies can helpto improve system adequacy by enabling moreefficient system operation and the addition ofregional energy resources to the electricity mix.The increased amounts of data gathered from asmart grid can show where operational efficiencycan be improved and increased automation canimprove control of various parts of the system, Source: Norwegian Ministry of Petroleum and Energy.enabling fast response to changes in demand.The introduction of regional energy resources,including variable generation such as solar, wind, KEY POINT: The Nordic electricity systemsmall-scale hydro, and combined heat and power, successfully integrates large amounts ofas well as dispatchable generation such as biomass, variable renewable energy in a regionalreservoir-based hydropower and concentrating grid by making use of interconnections.10 www.nerc.com/page.php?cid=1|15|123Box 2. Electricity system flexibility Flexibility is the capability of a power system to maintain reliable supply by modifying production or consumption in the face of rapid and large imbalances, such as unpredictable fluctuations in demand or in variable generation. It is measured in terms of megawatts (MW) available for ramping up and down, over time. The term flexibility is used here to include power system electricity generation, transport, storage, trading and end-use consumption. Smart grids can optimise the operation of a range of flexibility mechanisms in three contexts: the power market, system operation and the use of grid hardware. Resources that contribute to flexibility include dispatchable power plants, demand-side management and response, energy storage facilities and interconnection with adjacent markets. Source: IEA,2011. Electricity system needs for today and the future 15
  18. 18. Adequacy concerns introduced by the deployment zz onsumers are not adequately informed about C of variable generation technology can be the benefits, costs and risks associated with addressed by a number of flexibility mechanisms, smart grid systems. such as direct trading of electricity between zz nsufficient security features are being built I regions. One of the best examples of such into certain smart grid systems. trading is the Nordic electricity system, where zz he electricity industry does not have an T significant interconnection and well functioning effective mechanism for sharing information markets between regions allow for high levels of on cyber security. wind energy deployment (Figure 7). Smart grid technology can address the complex power flow zz he electricity industry does not have metrics T problems that result from wide-area wholesale for evaluating cyber security. trading by allowing them to be managed with These findings confirm that cyber security must increased efficiency and reliability. be considered as part of a larger smart grid deployment strategy. Lessons can be learned System security from other industries that have addressed these Although a number of OECD countries have challenges, such as banking, mobile phones recently experienced large-scale blackouts, their and retail, but in the context of infrastructure- electricity systems are regarded as generally related systems, dedicated focus is needed. secure, according to industry-specific indices that For example, the Joint Research Council of the measure the number and duration of outages. European Commission has initiated the European Smart grid technologies can maintain and improve network for the Security of Control and Real-Time system security in the face of challenges such as Systems (ESCoRTS).11 ESCoRTS is a joint project ageing infrastructure, rising demand, variable among European Union industries, utilities, generation and electric vehicle deployment. By equipment manufacturers and research institutes, using sensor technology across the electricity under the lead of the European Committee system, smart grids can monitor and anticipate for Standardisation (Comité européen de system faults before they happen and take normalisation, or CEN), to foster progress towards corrective action. If outages do occur, smart grids cyber security of control and communication can reduce the spread of the outages and respond equipment in Europe. The adoption of such models more quickly through automated equipment. that work to develop solutions for cyber security, while allowing data to be used for acceptable purposes, is required for successful deployment of Cyber security smart grid technologies. Smart grids can improve electricity system reliability and efficiency, but their use of new ICTs can also introduce vulnerabilities that jeopardise reliability, including the potential for cyber attacks. Cyber security is currently being addressed by several international collaborative organisations. One recent US study summarised the following results (GAO, 2011): zz spects of the electricity system regulatory A environment may make it difficult to ensure the cyber security of smart grid systems. zz tilities are focusing on regulatory compliance U instead of comprehensive security. 11 www.escortsproject.eu/16 Technology Roadmaps  Smart grids
  19. 19. Smart grid deploymentSmart grid technologies help system operators to understand and optimise power system components, behaviour andThe many smart grid technology areas – each performance. Advanced system operation toolsconsisting of sets of individual technologies – avoid blackouts and facilitate the integration ofspan the entire grid, from generation through variable renewable energy resources. Monitoringtransmission and distribution to various types of and control technologies along with advancedelectricity consumers. Some of the technologies system analytics – including wide-area situationalare actively being deployed and are considered awareness (WASA), wide-area monitoring systemsmature in both their development and application, (WAMS), and wide-area adaptive protection,while others require further development and control and automation (WAAPCA) – generate datademonstration. A fully optimised electricity system to inform decision making, mitigate wide-areawill deploy all the technology areas in Figure 8. disturbances, and improve transmission capacityHowever, not all technology areas need to be and reliability.installed to increase the “smartness” of the grid. Information and communicationsWide-area monitoring technology integrationand control Underlying communications infrastructure,Real-time monitoring and display of power- whether using private utility communicationsystem components and performance, across networks (radio networks, meter mesh networks)interconnections and over large geographic areas, or public carriers and networks (Internet, cellular,Figure 8. Smart grid technology areas Generation Transmission Distribution Industrial Service Residential Transmission lines Padmount Distribution lines transformer Distribution substation Transmission substation Wide-area monitoring and control Information and communications technology (ICT) integration (ICT) Information and communications technology integration Renewable and distributed generation integration Transmission enhancement applications Distribution grid management Advanced metering infrastructure (AMI) EV charging infrastructure Customer-side systems (CS)Source: Technology categories and descriptions adapted from NETL, 2010 and NIST, 2010. KEY POINT: Smart grids encompass a variety of technologies that span the electricity system. Smart grid deployment 17
  20. 20. cable or telephone), support data transmission Distribution grid management for deferred and real-time operation, and during outages. Along with communication devices, Distribution and sub-station sensing and significant computing, system control software automation can reduce outage and repair and enterprise resource planning software support time, maintain voltage level and improve asset the two-way exchange of information between management. Advanced distribution automation stakeholders, and enable more efficient use and processes real-time information from sensors management of the grid. and meters for fault location, automatic reconfiguration of feeders, voltage and reactive Renewable and distributed power optimisation, or to control distributed generation. Sensor technologies can enable generation integration condition- and performance-based maintenance Integration of renewable and distributed of network components, optimising equipment energy resources – encompassing large scale performance and hence effective utilisation at the transmission level, medium scale at the of assets. distribution level and small scale on commercial or residential building – can present chalenges Advanced metering infrastructure for the dispatchability and controllability of these Advanced metering infrastructure (AMI) involves resources and for operation of the electricity the deployment of a number of technologies – in system. Energy storage systems, both electrically addition to advanced or smart meters12 that enable and for themally based, can alleviate such two-way flow of information, providing customers problems by decoupling the production and and utilities with data on electricity price and delivery of energy. Smart grids can help through consumption, including the time and amount of automation of control of generation and demand electricity consumed. AMI will provide a wide (in addition to other forms of demand response) to range of functionalities: ensure balancing of supply and demand. zz Remote consumer price signals, which can provide time-of-use pricing information. Transmission enhancement zz Ability to collect, store and report customer applications energy consumption data for any required There are a number of technologies and time intervals or near real time. applications for the transmission system. Flexible zz Improved energy diagnostics from more AC transmission systems (FACTS) are used to detailed load profiles. enhance the controllability of transmission zz Ability to identify location and extent of networks and maximise power transfer capability. outages remotely via a metering function that The deployment of this technology on existing sends a signal when the meter goes out and lines can improve efficiency and defer the need of when power is restored. additional investment. High voltage DC (HVDC) zz Remote connection and disconnection. technologies are used to connect offshore wind and solar farms to large power areas, with zz Losses and theft detection. decreased system losses and enhanced system zz Ability for a retail energy service provider to controllability, allowing efficient use of energy manage its revenues through more effective sources remote from load centres. Dynamic line cash collection and debt management. rating (DLR), which uses sensors to identify the current carrying capability of a section of network Electric vehicle charging in real time, can optimise utilisation of existing infrastructure transmission assets, without the risk of causing overloads. High-temperature superconductors Electric vehicle charging infrastructure handles (HTS) can significantly reduce transmission losses billing, scheduling and other intelligent features and enable economical fault-current limiting with for smart charging (grid-to-vehicle) during low higher performance, though there is a debate over energy demand. In the long run, it is envisioned the market readiness of the technology. 12 he European Smart Meters Industry Group (ESMIG) defines four T minimum functionalities of a smart meter: remote reading, two- way communication, support for advanced tariff and payment systems, and remote disablement and enablement of supply.18 Technology Roadmaps  Smart grids
  21. 21. that large charging installation will provide power smart appliances and distributed generation.13system ancillary services such as capacity reserve, Energy efficiency gains and peak demand reductionpeak load shaving and vehicle-to-grid regulation. can be accelerated with in-home displays/energyThis will include interaction with both AMI and dashboards, smart appliances and local storage.customer-side systems. Demand response includes both manual customer response and automated, price-responsiveCustomer-side systems appliances and thermostats that are connected to an energy management system or controlled with aCustomer-side systems, which are used to help signal from the utility or system operator.manage electricity consumption at the industrial,service and residential levels, include energy 13 esidential small-scale generation equipment on customer Rmanagement systems, energy storage devices, premises falls under both categories of consumer-side systems and renewable and distributed energy systems.Table 3. Smart grid technologiesTechnology area Hardware Systems and softwareWide-area monitoring Phasor measurement units (PMU) Supervisory control and data acquisitionand control and other sensor equipment (SCADA), wide-area monitoring systems (WAMS), wide-area adaptive protection, control and automation (WAAPCA), wide- area situational awareness (WASA)Information Communication equipment (Power Enterprise resource planning softwareand communication line carrier, WIMAX, LTE, RF mesh (ERP), customer information system (CIS)technology integration network, cellular), routers, relays, switches, gateway, computers (servers)Renewable and distributed Power conditioning equipment Energy management system (EMS),generation integration for bulk power and grid support, distribution management system (DMS), communication and control hardware SCADA, geographic Information for generation and enabling storage system (GIS) technologyTransmission enhancement Superconductors, FACTS, HVDC Network stability analysis, automatic recovery systemsDistribution grid Automated re-closers, switches Geographic information system (GIS),management and capacitors, remote controlled distribution management system (DMS), distributed generation and storage, outage management system (OMS), transformer sensors, wire and cable workforce management system (WMS) sensorsAdvanced metering Smart meter, in-home displays, Meter data management system (MDMS)infrastructure servers, relaysElectric vehicle charging Charging infrastructure, Energy billing, smart grid-to-vehicleinfrastructure batteries, inverters charging (G2V) and discharging vehicle-to-grid (V2G) methodologiesCustomer-side systems Smart appliances, routers, in-home Energy dashboards, energy management display, building automation systems, systems, energy applications for smart thermal accumulators, phones and tablets smart thermostat Smart grid deployment 19

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