ELECTRICITY

SMART GRIDS
AND SMART
ENERGY SYSTEMS

TABLE OF CONTENTS
CONTENTS PAGE NO.
Introduction…………………………………………………………………………………. 1
Literature Review : …………………………………………………………………………. 6
Electricity Smart Grids : ………………………………………………………… 6
What is a Smart Grid? Smart Grid definition and some
challenges to address……………………………………………………… 6
Electricity network and the Grid in Evolution…………………………….. 10
Smart Grid and Modernization……………………………………………. 12
Smart Grid compared to traditional electricity grids………………………. 12
Smart Grids more than smart meters and advance
metering infrastructure…………………………………………………….. 14
Decenralized energy generation and smart grids…………………………… 16
Historical development of electricity grid………………………………….. 18
I.T Companies disrrupting the energy market……………………………… 26
Benefits of smart grid deployments………………………………………… 29
Smart Energy Systems : ………………………………………………………….. 29
How to build a smart energy system? …………………………………….. 30
Foundation of Smart Energy Systems…………………………………….. 33
Rol of smart energy systems in 1.5 degrees………………………………. 35
Smart energy systems and decarbonisation……………………………….. 36
Scaling smart enegy systems for global impact…………………………… 38
Methodology………………………………………………………………………………….. 40
Findings……………………………………………………………………………………….. 45
Conclusion……………………………………………………………………………………. 48
References…………………………………………………………………………………….. 50
 INTRODUCTION

Every day, our species chews its way through more than a million terajoules of energy.
That’s roughly equivalent to what we would use if all 7.5 billion of us boiled 70 kettles of
water an hour around the clock. Or 3,000 times the daily output of Palo Verde nuclear power
station in Arizona – one of the world’s largest – running at full capacity.

With the global population swelling and industrialisation on the rise in developing nations,
humanity’s hunger for energy has reached unprecedented levels. More than half of our energy
comes from fossil fuels extracted from deep within the Earth’s crust. It is estimated that since
commercial oil drilling began in the 1850s, we have sucked up more than 135 billion tonnes
of crude oil to drive our cars, fuel our power stations and heat our homes. That figure
increases every day.

But our gas guzzling over the past two centuries has taken a potentially devasting toll on the
planet. Burning of coal, oil and gas has been inextricably linked to the rising levels of
greenhouse gases in Earth’s atmosphere and is a leading contributor of climate change. The
world’s scientists agree that we are on a path towards disaster that can only be stopped by
weaning ourselves off our fossil fuel habit. But that leaves us with a problem. How do we
ensure the lights stay on?
“The energy industry is facing decades of transformation,” according to a recent report by the
World Energy Council. Yet the implications of the changes underway go far deeper. There
are political, economic and social issues at stake, but it may also require each of us to make
some fundamental shifts in our behaviour too.

There can be no doubt that implementing a shift in where we get our energy from is  one of
the grand challenges facing our planet today. BBC Future Now spoke to a panel of experts
about what hurdles we must now overcome and where technology may provide an answer.

Perhaps the greatest issue raised by the scientists, policy experts and companies we spoke to
is how to cope with the immediate hike in energy demands expected in the coming decades.

“There are still a lot of people around the world – 1.2 billion or so – who do not have access
to modern energy services,” explains Jim Watson, director of the UK Energy Research

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Centre. “There is going to be a lot of rising demand from regions like Asia, Latin America
and parts of Africa.”

There are still an estimated three billion people around the world who cook and heat their
homes using simple stoves or open fires that burn wood, animal dung or coal. As developing
nations become more industrialised, they will need access to reliable electricity supplies. In
countries where development is already underway, energy use will soar as increasing wealth
leads to a swelling middle class and the lifestyle trappings that brings with it.

“Globally, the greatest challenge for energy is going to be cooling,” says Martin Freer,
director of the Birmingham Energy Institute at the University of Birmingham. “With the
growth of the middle class in India and China, there will be an associated demand for air
conditioning. The United Nations' Intergovernmental Panel on Climate Change suggest that
by the middle of the present century, the demand for cooling will outstrip the demand for
heating.” Indeed, it is estimated that by 2040, the world’s energy consumption will have
increased by almost 50%.

But faced with global agreements to reduce the amount of carbon dioxide being released into
the atmosphere, how will we meet this growing demand without dooming our ice caps and
drowning low-lying regions beneath rising sea levels?

In truth, the picture may not be as bleak as it could be. Around a fifth of the world’s primary
energy supply already comes from renewable sources such as wind, solar, hydro and
geothermal. This sector is expected to continue growing by 2.6% each year until 2040.

Until recently, the main source of renewable energy was hydroelectric power and wind has
been the fastest growing. But new advances in solar panel technology, which allow them to
generate power even in overcast conditions, have seen a surge in the amount of energy being
produced using the sun.

In the UK, for example, more than 12GW of solar energy has been added to the electricity
network in the past 12 months – the equivalent of an entire coal-fired power station.
Worldwide, the amount of solar energy production grew by 50% last year. Researchers in
many countries are working on new photovoltaic cells that can be printed on flexible sheets,
which could reduce the costs of solar further.

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Hooking up these new energy producers to existing grids won’t be straightforward, however.
“One of the big challenges of deploying these intermittent renewables like wind and solar is
the impact they could have on the system,” says Watson. In many Western countries, the
networks that carry our electricity supply into our homes and offices are decades old,
designed to deal with steady, reliable power generation. Wind and solar energy are highly
dependent on the weather – and the time of day, in the case of solar – meaning they do not
necessarily produce the bulk of their electricity at times when there are peaks in demand.

“It used to be that the summer was a really quiet time for the grid operator compared to the
winter,” explains Watson. “Now they are having this peak in generation in summer due to
solar energy when demand is low. They are having to juggle this as we cannot store
electricity in large quantities yet. This is a new way of operating for them.”

Most countries are currently tackling this by keeping more reliable sources of energy
production in reserve. This means having nuclear, gas and even coal fired power stations
sitting idle or running at a low level, but ready to ramp up their production should the wind
drop or when the sun dips beneath the horizon.

According to Robert Armstrong, director of the Massachusetts Institute of Technology

Energy Initiative, this puts limits on how much renewable energy you can practically use.
Armstrong’s models suggest that without energy storage only about 10% of our power could
come from solar. “The reason is that solar is concentrated around midday, so you need
generation to match demand in the evenings and the mornings. There are issues around who
builds that and who pays for that.”

One solution to this is to make the grids that distribute the electricity bigger – create so-called
“supergrids”. The basic idea is that if energy is shared over a wider area, there is more chance
that the sun will be shining or the wind will be blowing in one part of a supply network, if not
another.

These schemes envisage connecting the energy grids of several countries together so
electricity can be shared between nations. Proposals for a European supergrid and one in the
United States have been discussed for decades. More recently there have even been calls for a

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global energy grid – an idea that has had support from Chinese State Grid, which set up the
Global Energy Interconnection Development and Cooperation Organization.

There are already some moves in this direction. The UK is building new underwater
connections to energy grids in France, Belgium, Denmark, Ireland and Norway, with a
capacity to import or export up to 11GW of electricity. There are also moves towards
building an Asian supergrid which will connect Japan, Russia, China, Mongolia and South
Korea.

“Transferring electricity from regions that need it least to those that need it most would help
to enable substantial economic benefits,” says Ksenia Letova, project manager of the Asian
Supergrid at Skoltech Institute for Science and Technology in Russia. “In countries like Japan
and South Korea, the maximum seasonal load falls on the summer because of extensive use
of air conditioning. In the Russian Far East and Siberia this is the period of the lowest
electricity demand.”

Using the excessive capacities of neighbouring countries may help to reduce costs of building
new energy projects. For example, there are plans to develop large-scale wind and solar
power stations in the Mongolian Gobi desert and in northern regions of China. These regions
are sparsely populated but allowing the excess energy produced to be exported could bring in
significant revenue.

“The problem is the cost of building such a grid,” says Janusz Bialek, director of the Centre
for Energy Systems at Skoltech Institute of Science and Technology. Transmitting electricity
over long distances can be inefficient and many countries will need to upgrade their
powerlines to cope.

“There are political considerations too,” says Bialek. “Any failure, or attack on, a global grid
could have very serious consequences threatening security of supply in many countries.”

It is an important point. Energy security is already the main driving force in the geopolitical
landscape. Countries with large oil reserves can largely dictate global policy and nations like
Saudi Arabia have won themselves powerful allies like the United States as a result of the
black gold buried beneath their territory.

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“A critical issue for us will be to figure out how to reduce carbon dioxide emissions from
those energy sources. That is going to require carbon capture storage and utilisation.
Lowering the cost of capturing the carbon is probably the toughest piece of that but we also
need to figure out how to store it for geological timeframes.”

Biogas and biofuels are often seen as one of the most viable alternatives to fossil fuels, with
companies like BP investing huge sums into developing production lines. Yet burning these
fuels will not halt the release of greenhouse gases into the atmosphere. And with the
burgeoning extraction of shale oil and gas in many parts of the world, it seems likely we will
be reliant on fossil fuels for some time to come.

“For years we have consumed energy whenever we like and paid a flat rate for that,” says
Leslie. “We will have to start shifting our use of energy to when it is there and available
rather than shifting the energy production to match our use.”

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 LITERATURE REVIEW

ELECTRICITY SMART GRIDS :

 WHAT IS A SMART GRID? SMART GRID DEFINITIONS AND

SOME CHALLENGES TO ADDRESS.

A smart grid has been defined as (a network of) self-sufficient systems enabling the
integration of power generation sources of any type and/or scale to the electrical grid that
reduces the workforce and aims to offer safe, reliable, high-quality and sustainable electricity
to consumers and organizations alike.

The aspect of workforce reduction is indeed important as well. It is expected that smart grids
will need very little workers as they become the true self-sufficient systems they are aimed to
be. It is less emphasized in definitions offered by national and international instances working
on smart grids whereby mainly the benefits are addressed (some more challenges are
mentioned at the bottom of this article).

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Another definition, from Debashish Chakraborty: “A smart grid is an intelligent digitized
energy network delivering energy in an optimal way from source to consumption”.

“This is achieved by integrating information, telecommunication, and power technologies

with the existing electricity system. It introduces a two-way dialogue where electricity and
information can be exchanged between a utility and its customers. It’s a developing network
of communications, controls, computers, automation and new technologies and tools working
together to make the grid more efficient, more reliable, more secure and greener”.

And of course, we can’t forget those national and supranational instances (electricity grids
can be regional, national, international etc., depending on the region) who have their smart
grid projects/policies.

The EU defines a smart grid as follows: a smart grid is an electricity network that can cost-
efficiently integrate the behavior and actions of all users connected to it – generators,
consumers and those that do both – to ensure economically efficient, sustainable power
system with low losses and high levels of quality and security of supply and safety.

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The benefits of a smart grid include improved efficiency and reliability of the electricity
supply, integration of more renewable energy into existing network, supporting the
development of electric vehicles at scale, new solutions for customers to optimize their
electricity consumption and reduction of carbon emissions.

While the EU (PDF downloads) recognizes that there are elements of smartness in several

parts of electrical power grids it distinguishes between existing grids and smart grids as
follows: “the difference between a today’s grid and a smart grid of the future is mainly the
grid’s capability to handle more complexity than today in an efficient and effective way”.

According to the EU a smart grid employs innovative products and services together with
intelligent monitoring, control, communication, and self-healing technologies to:

 Better facilitate the connection and operation of generators of all sizes and
technologies;

 Allow consumers to play a part in optimizing the operation of the system;

 Provide consumers with greater information and options for how they use their
supply;

 Significantly reduce the environmental impact of the whole electricity supply

system;

 Maintain or even improve the existing high levels of system reliability, quality and
security of supply;

 Maintain and improve the existing services efficiently.

Similar smart grid definitions exist in other regions through the world where smart grid
initiatives exist which is the case for most countries, obviously including the US.

The U.S. Department of Energy describes “the Smart Grid” (as the overall smart grid
initiative in the US is called) as representing an unprecedented opportunity to move the
energy industry into a new era of reliability, availability, and efficiency that will contribute to
economic and environmental health.

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It sums up some benefits associated with the Smart Grid (again, the initiative, but you can
expand it to smart grids overall):

 More efficient transmission of electricity;

 Quicker restoration of electricity after power disturbances;

 Reduced operations and management costs for utilities, and ultimately lower
power costs for consumers;

 Reduced peak demand, which will also help lower electricity rates;

 Increased integration of large-scale renewable energy systems;

 Better integration of customer-owner power generation systems, including

renewable energy systems;

 Improved security.

 SMART GRIDS: SOME ADDITIONAL CHALLENGES.

Obviously, there are also challenges regarding the movement to a smart grid. Some were
addressed earlier in this overview. Additional ones include consumer concerns (privacy
and personal data protection) and cybersecurity.

In countries where smart meter initiatives have started we often see resistance from
consumers (whereby often the installation of a smart meter in the end becomes an option; in
other countries refusing leads to financial consequences or, let’s say accepting means a
financial reward).

A second challenge is certainly the overall cybersecurity aspect which is typical in all

industrial environments where digitization and digital transformation are ongoing, data
become key and IT and OT converge (IT stands for information technology, OT
for operational technology).

Smart grids will increase flexibility by the development of additional intelligence (e.g.
temperature control of transformers, real time thermal monitoring of cables, etc) integrated

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within network equipments and will improve the existing communication systems (EU
Commission Task Force for Smart Grids)

Additional challenges in smart grids include regulatory changes, the complexity in integrating
sources, systems and partnerships between various players in a deregulated market, the local
situation whereby a selected number of large companies often still dominate and changing
attitudes among prosumers.

The goal of this article was to introduce smart grids and explain the essence of the smart grid
concept (we call it a concept as there is no real smart grid yet). However, there is of course
more to it given the sheer complexity of electrical grids, the involved components and the
many stakeholders.

Smart grids obviously fit in a broader digital transformation of utilities and, given these many
stakeholders (including local and higher-level authorities) and the fact everything is
connected also touches several other so-called ‘smart’ areas, from smart
manufacturing and smart cities to the smart home and smart buildings.

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  SMART GRIDS: ELECTRICITY NETWORKS AND THE GRID IN
EVOLUTION.

A smart grid is an electricity network/grid enabling a two-way flow of electricity and data
whereby smart metering is often seen as a first step.

Smart grids – as a concept – became known over a decade ago and are essential in the digital
transformation of the electricity sector. An introduction with definitions, trends and essential
characteristics of smart grids.

A smart grid is an electricity network enabling a two-way flow of electricity and data with
digital communications technology enabling to detect, react and pro-act to changes in usage
and multiple issues. Smart grids have self-healing capabilities and enable electricity
customers to become active participants.

Big data analytics and IoT technologies are important technology drivers in smart grids
whereby analytics shift to the edge, as in edge computing. Smart grids leverage more
technologies but aren’t just about IT nor even technologies.

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A smart grid serves several purposes and the movement from traditional electric grids to
smart grids is driven by multiple factors, including the deregulation of the energy market,
evolutions in metering, changes on the level of electricity production,
decentralization (distributed energy), the advent of the involved ‘prosumer’, changing
regulations, the rise of microgeneration and (isolated) microgrids, renewable energy
mandates with more energy sources and new points where and purposes for which electricity
is needed (e.g. electrical vehicle charging points).

An electrical grid or electric grid is a network to deliver electricity from the producer(s) and
places where it’s generated and transformed (power plants and substations) to the final
destinations where electricity is ‘consumed’: households, businesses, various facilities and
the consumer in general.

In practice it is a highly interconnected network with several components such as substations,

transmission lines and wiring, distribution lines, transformers and more.

 SMART GRID AND GRID MODERNIZATION – WHAT’S IN A

NAME?

Do note that some people in the industry don’t talk about smart grid anymore. They see that
term as referring to a first stage where advanced metering infrastructure (AMI) initiatives
were deployed with first-generation smart meters. Grid ecosystems payers have various
challenges in the decentralization of energy production and transport.

They prefer to speak about power grid modernization, for example, as that is what it’s really
about with far more elements than smart metering, sending data in two directions and adding
power to the grid in the opposite direction. However, although many countries, regions, states
etc. already took such smart metering initiatives a decade ago there are still several where this
is only really starting. In many countries the challenges of grid players are mainly seen in the
decentralization of the production of energy and the transport of it.

For IoT companies such as AllThingsTalk the challenge that energy and grid players ask
them to help resolve is the connection of a multitude of meters and normalization of resulting

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data, enabling to roll out faster and in an automated way as founder Tom Casaer explains in
an interview.

 THE SMART GRID COMPARED TO TRADITIONAL ELECTRICITY

GRIDS – THE ESSENCE AND DIFFERENCES.

Traditional electricity grids had almost no storage capabilities, they are demand-driven and
have a hierarchical structure. In an electricity network voltage is gradually lowered so the
electricity can be used by these different consumers: from transmission voltage levels to
distribution voltage levels to service voltage levels (in reality it’s both gearing up and down
and thus a bit more complex).

Typically, a distinction is made between transmission (transmission grid: high and extra high
voltage) and distribution (distribution grid: lower voltage). The purpose of an electrical grid
is to make sure that electricity is always provided when and where needed, without
interruption – and herein lie many challenges where a smart grid can already offer
solutions/answers.

Given the complexity and the multiple challenges that can arise such as the consequences of
severe weather conditions, damage by wildlife, human sabotage and other external factors
and internal factors (issues with equipment failure and crucial assets) managing a grid is very
complex and a dedicated field for experts who also need to consider the choices regarding
energy regulations and sustainability initiatives by governments. In smart grids, self-healing
capabilities enable to automatically detect and respond to grid problems and to ensure quick
recovery after disturbances.

The two-way flow of electricity and data that is the essential characteristic of a smart grid
enables to feed information and data to the various stakeholders in the electricity market
which can be analyzed to optimize the grid, foresee potential issues, react faster when
challenges arise and build new capacities – and services – as the power landscape is
changing.

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The electricity market, the consumption of electricity, regulations, demands of various
stakeholders and the very production of electricity are all changing. So, smart grid initiatives
exist across the globe, albeit sometimes with different approaches and goals.

While smart grid still refers to the bi-directional transmission of data and electricity (with
prosumers and organizations generating electricity too), the meaning and reach of the term
has broadened given the many possibilities enabled by this important change and ever more
technologies used in a context of smart grid deployments.

This includes, as previously mentioned, IoT technologies (electrical grids are highly sensor-

intensive operations since long before anyone used the term IoT), big data and advanced
analytics with artificial intelligence and machine learning on top, ample communication
standards used to send data from one point to another (e.g. from smart meters to utility
companies) and more technologies (digital twins, for example) which we see popping up in
the digital transformation of utilities and in Industry 4.0.

As said, we also must mention edge computing here. Edge computing and edge analytics play
an important role in utilities overall.

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  SMART GRIDS: MORE THAN SMART METERS AND ADVANCED
METERING INFRASTRUCTURE.

As mentioned, one of the first and perhaps main aspects of smart grid initiatives, when people
first hear about them, concern metering and so-called smart meters. Smart meters are the next
stage in an evolution that started decades ago and led to the first smart grid technologies such
as automatic metering and, next Advanced Metering Infrastructure.

Microgrids play an important role in building a low-carbon future because they bring
resilience to the main grid, optimize energy costs, allow for renewable energy hosting,
increase electrical vehicle integration, and improve energy accessibility.

However, a smart grid is about much more than just smart metering and some other elements
include the distribution lines and substations (substation automation and, increasingly, digital
substations), technologies and mechanisms to prevent power outages and ensure power
quality (availability, reliability, etc.), the integration of energy from various sources with an
increased focus on ‘green energy’, smart power generation, sensing along transmission lines,
power system automation, the inclusion of microgeneration whereby especially organizations
and larger facilities can generate their own power and supply it to the central network
grid (on top of prosumers), better and more power storage capabilities, ways to enhance
security, alternative transmission methods to save on precious metals and the design of more
modern and stable electrical grids in countries and areas where old grids need replacement.

Currently there is a lot of focus on self-healing grid capacities, microgrids and distributed
energy resources (DER), the communication architectures and technologies in grids and the
usage of smart grid technologies/solutions/approaches in regions with older electricity grids
that suffer from outages and poor power quality.

“One of the primary characteristics of a smart grid is its ability to self-heal” confirms Julio
Cesar Martins of Schneider Electric (that has a channel program, called EcoXpert for
certifications in critical power, substation automation etc. and is one of the leading players in
the smart grid market).

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Pointing to FLISR technology (fault location, isolation, and service restoration) he adds that
self-healing capabilities minimize blackouts because they allow for continuous self-
assessments that inspect, analyze, react to, and automatically respond to problems.

This is made possible through the widespread deployment of smart sensors and other
intelligent devices and automated controls that check and evaluate the status and condition of
the network to identify abnormalities and problems he states.

Flexibly is another keyword. According to the previously mentioned by 2023, 65% of

electricity companies will have invested in digital technologies and platforms to support
flexibility services, thereby activating a load potential of up to 35% of installed capacity.

Using the power of analytics, a smart grid typically includes Industrial IoT use cases in areas
such as asset optimization, predictive maintenance, the mentioned self-healing and any
method to get (parts of) grids up again in case of issues or needed maintenance or external
factors and ways to correct and optimize power quality while making sure demand for
electricity is met in the most optimal way with energy savings and environmental mandates
never being far away.

Centralized power generation is increasingly giving way to decentralized as new technologies

continue to allow for different forms of power generation, storage, and transmission. The
prosumer plays an important role in the efforts of energy companies and various players in
the utilities value chain such as energy retailers whereby customer-centricity and improving

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customer experience are key. In 2019 utilities/energy retailers double their investments in
artificial intelligence to improve convenience, customization, and control for clients, thus
enhancing customer experience says IDC.

Smart grids shouldn’t just lead to less power waste and enhance competitiveness in the
electricity sector but also aim to put the consumer more in control (whereby energy
companies also hope to see less unpaid bills).

 DECENTRALIZED ENERGY GENERATION AND THE SMART

GRID.

As mentioned, one of the main changes in the electricity industry is the rise of so-called
decentralized energy generation and of microgrids/microgeneration.

Decentralized energy generation essentially means that more and more energy gets generated
(and stored) in various ways that are closer to the customer that needs the energy. If
consumers of energy in the broadest sense generate their own energy more often this de facto
means that less money is made in various ‘higher’ levels of electrical grids.

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“Closer” doesn’t necessary mean in terms of distance. If a company has power-generating
means where it is located, then chance is indeed high nothing else is physically closer. Yet,
you can perfectly imagine situations where a power plant could be physically very close as
well. What matters is the ability to integrate the various resources whereby decentralized
energy in general refers to the energy produced closer to the point of usage instead of at some
large plant from where it is sent across the national grid.

By 2023, 65% of electricity will have invested in digital tecnologies and platforms to support
flexibility services, thereby activating a load potential of upto 35% of installed
capacity(IDC).

“Centralized power generation is increasingly giving way to decentralized as new

technologies continue to allow for different forms of power generation, storage, and
transmission” says Emmanuel Lagarrigue. Decentralization is nothing less than a revolution
in how we generate, store, move, and consume energy he adds.

One of the challenges is integrating all this but also sending additional capacity that might be
created in a decentralized way to the grid whereby companies – and people – become sellers
of energy as well as buyers. You can imagine that this isn’t the easiest task in the smart grid
equation. Isolated microgrids also enable to minimize impact of potential disruption.

 FROM ADVANCED METERING INFRASTRUCTURE TO

DISTRIBUTED ENERGY RESOURCES.

A final thought: as said the smart grid concept isn’t new. Moreover, it’s a journey and gradual
processes, a spectrum encompassing many possible different steps and challenges.
Nevertheless it’s clear that we’ve moved far beyond the early days of advanced metering.
Smart grids include various operation and energy measures such as smart meters, smart
appliances, renewable energy resources, and energy efficient resources.

Zach Pollock describes the evolution on the ‘smart grid journey’ since the term first popped
up well: “The first wave of grid investments occurred in the late 2000s under the banner of
smart grid technology, resulting in utility-owned, front-of-the-meter assets like advanced
metering infrastructure (AMI) and distribution automation devices. Today, grid

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modernization has evolved to be more inclusive of customer preferences and desires. In many
geographies, this has translated to infrastructure and process improvements that have
facilitated the integration of distributed energy resources (DER)“.

As is explained here, distributed energy resources (DERs) are electricity-producing resources

or controllable loads that are directly connected to a local distribution system or connected to
a host facility within the local distribution system.

DER systems typically use renewable energy sources, including small hydro, biomass,
biogas, solar power, wind power, and geothermal power, and increasingly play an important
role for the electric power distribution system.

 HISTORICAL DEVELOPMENT OF THE ELECTRICITY GRID.

The first alternating current power grid system was installed in 1886 in Great Barrington,

Massachusetts. At that time, the grid was a centralized unidirectional system of electric
power transmission, electricity distribution, and demand-driven control.

In the 20th century, local grids grew over time and were eventually interconnected for
economic and reliability reasons. By the 1960s, the electric grids of developed countries had
become very large, mature, and highly interconnected, with thousands of 'central' generation
power stations delivering power to major load centres via high capacity power lines which
were then branched and divided to provide power to smaller industrial and domestic users
over the entire supply area. The topology of the 1960s grid was a result of the strong
economies of scale: large coal-, gas- and oil-fired power stations in the 1 GW (1000 MW) to
3 GW scale are still found to be cost-effective, due to efficiency-boosting features that can be
cost-effective only when the stations become very large.

Power stations were located strategically to be close to fossil fuel reserves (either the mines
or wells themselves or else close to rail, road, or port supply lines). Siting of hydroelectric
dams in mountain areas also strongly influenced the structure of the emerging grid. Nuclear
power plants were sited for the availability of cooling water. Finally, fossil fuel-fired power
stations were initially very polluting and were sited as far as economically possible from
population centres once electricity distribution networks permitted it. By the late 1960s, the
electricity grid reached the overwhelming majority of the population of developed countries,
with only outlying regional areas remaining 'off-grid'.

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Metering of electricity consumption was necessary on a per-user basis in order to allow
appropriate billing according to the (highly variable) level of consumption of different users.
Because of limited data collection and processing capability during the period of growth of
the grid, fixed-tariff arrangements were commonly put in place, as well as dual-tariff
arrangements where night-time power was charged at a lower rate than daytime power. The
motivation for dual-tariff arrangements was the lower night-time demand. Dual tariffs made
possible the use of low-cost night-time electrical power in applications such as the
maintaining of 'heat banks' which served to 'smooth out' the daily demand, and reduce the
number of turbines that needed to be turned off overnight, thereby improving the utilisation
and profitability of the generation and transmission facilities. The metering capabilities of the
1960s grid meant technological limitations on the degree to which price signals could be
propagated through the system.

From the 1970s to the 1990s, growing demand led to increasing numbers of power stations.
In some areas, the supply of electricity, especially at peak times, could not keep up with this
demand, resulting in poor power quality including blackouts, power cuts, and brownouts.
Increasingly, electricity was depended on for industry, heating, communication, lighting, and
entertainment, and consumers demanded ever-higher levels of reliability.

Towards the end of the 20th century, electricity demand patterns were established: domestic
heating and air-conditioning led to daily peaks in demand that were met by an array of
'peaking power generators' that would only be turned on for short periods each day. The
relatively low utilisation of these peaking generators (commonly, gas turbines were used due
to their relatively lower capital cost and faster start-up times), together with the necessary
redundancy in the electricity grid, resulting in high costs to the electricity companies, which
were passed on in the form of increased tariffs.

In the 21st century, some developing countries like China, India, and Brazil were seen as
pioneers of smart grid deployment.

 MODERNIZATION OPPORTUNITIES.

Since the early 21st century, opportunities to take advantage of improvements in electronic
communication technology to resolve the limitations and costs of the electrical grid have
become apparent. Technological limitations on metering no longer force peak power prices to
be averaged out and passed on to all consumers equally. In parallel, growing concerns over
environmental damage from fossil-fired power stations have led to a desire to use large

[20]
amounts of renewable energy. Dominant forms such as wind power and solar power are
highly variable, and so the need for more sophisticated control systems became apparent, to
facilitate the connection of sources to the otherwise highly controllable grid. Power
from photovoltaic cells (and to lesser extent wind turbines) has also, significantly, called into
question the imperative for large, centralised power stations. The rapidly falling costs point to
a major change from the centralised grid topology to one that is highly distributed, with
power being both generated and consumed right at the limits of the grid. Finally, growing
concern over terrorist attacks in some countries has led to calls for a more robust energy grid
that is less dependent on centralised power stations that were perceived to be potential attack
targets.

 EARLY TECHNOLOGICAL INNOVATIONS.

Smart grid technologies emerged from earlier attempts at using electronic control, metering,
and monitoring. In the 1980s, automatic meter reading was used for monitoring loads from
large customers and evolved into the Advanced Metering Infrastructure of the 1990s, whose
meters could store how electricity was used at different times of the day. Smart meters add
continuous communications so that monitoring can be done in real-time, and can be used as a
gateway to demand response-aware devices and "smart sockets" in the home. Early forms of
such demand side management technologies were dynamic demand aware devices that
passively sensed the load on the grid by monitoring changes in the power supply frequency.
Devices such as industrial and domestic air conditioners, refrigerators, and heaters adjusted
their duty cycle to avoid activation during times the grid was suffering a peak condition.
Beginning in 2000, Italy's Telegestore Project was the first to network large numbers (27
million) of homes using smart meters connected via low bandwidth power line
communication. Some experiments used the term broadband over power lines (BPL), while
others used wireless technologies such as mesh networking promoted for more reliable
connections to disparate devices in the home as well as supporting metering of other utilities
such as gas and water.[9]

Monitoring and synchronization of wide-area networks were revolutionized in the early

1990s when the Bonneville Power Administration expanded its smart grid research with
prototype sensors that are capable of very rapid analysis of anomalies in electricity quality
over very large geographic areas. The culmination of this work was the first operational Wide
Area Measurement System (WAMS) in 2000. Other countries are rapidly integrating this

[21]
technology — China started having a comprehensive national WAMS when the past 5-year
economic plan was completed in 2012.

 FEATURES.

The smart grid represents the full suite of current and proposed responses to the challenges of
electricity supply. Because of the diverse range of factors, there are numerous competing
taxonomies and no agreement on a universal definition. Nevertheless, one possible
categorization is given here.

 Reliability.

The smart grid makes use of technologies such as state estimation, that improve fault
detection and allow self-healing of the network without the intervention of technicians. This
will ensure a more reliable supply of electricity and reduce vulnerability to natural disasters
or attacks.

Although multiple routes are touted as a feature of the smart grid, the old grid also featured
multiple routes. Initial power lines in the grid were built using a radial model, later
connectivity was guaranteed via multiple routes, referred to as a network structure. However,
this created a new problem: if the current flow or related effects across the network exceed
the limits of any particular network element, it could fail, and the current would be shunted to
other network elements, which eventually may fail also, causing a domino effect. See power
outage. A technique to prevent this is load shedding by rolling blackout or voltage reduction
(brownout).

 Flexibility In Network Topology.

Next-generation transmission and distribution infrastructure will be better able to handle

possible bidirectional energy flows, allowing for distributed generation such as from
photovoltaic panels on building roofs, but also charging to/from the batteries of electric cars,
wind turbines, pumped hydroelectric power, the use of fuel cells, and other sources.

Classic grids were designed for a one-way flow of electricity, but if a local sub-network
generates more power than it is consuming, the reverse flow can raise safety and reliability
issues. A smart grid aims to manage these situations.

[22]
  Efficiency.

Numerous contributions to the overall improvement of the efficiency of energy infrastructure

are anticipated from the deployment of smart grid technology, in particular
including demand-side management, for example turning off air conditioners during short-
term spikes in electricity price, reducing the voltage when possible on distribution
lines Archived 2013-06-27 at the Wayback Machine through Voltage/VAR Optimization
(VVO), eliminating truck-rolls for meter reading, and reducing truck-rolls by improved
outage management using data from Advanced Metering Infrastructure systems. The overall
effect is less redundancy in transmission and distribution lines, and greater utilization of
generators, leading to lower power prices.

 Load adjustment/Load balancing.

The total load connected to the power grid can vary significantly over time. Although the
total load is the sum of many individual choices of the clients, the overall load is not
necessarily stable or slow varying. For example, if a popular television program starts,
millions of televisions will start to draw current instantly. Traditionally, to respond to a rapid
increase in power consumption, faster than the start-up time of a large generator, some spare
generators are put on a dissipative standby mode. A smart grid may warn all individual
television sets, or another larger customer, to reduce the load temporarily (to allow time to
start up a larger generator) or continuously (in the case of limited resources). Using
mathematical prediction algorithms it is possible to predict how many standby generators
need to be used, to reach a certain failure rate. In the traditional grid, the failure rate can only
be reduced at the cost of more standby generators. In a smart grid, the load reduction by even
a small portion of the clients may eliminate the problem.

 Sustainability.

The improved flexibility of the smart grid permits greater penetration of highly variable
renewable energy sources such as solar power and wind power, even without the addition
of energy storage. Current network infrastructure is not built to allow for many distributed
feed-in points, and typically even if some feed-in is allowed at the local (distribution) level,
the transmission-level infrastructure cannot accommodate it. Rapid fluctuations in distributed
generation, such as due to cloudy or gusty weather, present significant challenges to power
engineers who need to ensure stable power levels through varying the output of the more
controllable generators such as gas turbines and hydroelectric generators. Smart grid

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technology is a necessary condition for very large amounts of renewable electricity on the
grid for this reason. There is also support for vehicle-to-grid.

 Market-Enabling.

The smart grid allows for systematic communication between suppliers (their energy price)
and consumers (their willingness-to-pay), and permits both the suppliers and the consumers
to be more flexible and sophisticated in their operational strategies. Only the critical loads
will need to pay the peak energy prices, and consumers will be able to be more strategic in
when they use energy. Generators with greater flexibility will be able to sell energy
strategically for maximum profit, whereas inflexible generators such as base-load steam
turbines and wind turbines will receive a varying tariff based on the level of demand and the
status of the other generators currently operating. The overall effect is a signal that awards
energy efficiency, and energy consumption that is sensitive to the time-varying limitations of
the supply. At the domestic level, appliances with a degree of energy storage or thermal
mass (such as refrigerators, heat banks, and heat pumps) will be well placed to 'play' the
market and seek to minimise energy cost by adapting demand to the lower-cost energy
support periods. This is an extension of the dual-tariff energy pricing mentioned above.

Smart Grid will also facilitate distributed generation, especially the roof top solar generation,
by allowing movement and measurement of energy in both directions using control systems
and net metering that will help “prosumers” i.e. the consumers who both produce and
consume electricity, to safely connect to the grid.

[24]
  TECHNOLOGY.

The bulk of smart grid technologies are already used in other applications such as
manufacturing and telecommunications and are being adapted for use in grid operations.

Siemens Smart meters installed in the power station at Manauara Shopping Mall, the third-
largest energy consumer in Manaus.

 Integrated communications: Areas for improvement include: substation

automation, demand response, distribution automation, supervisory control, and
data acquisition (SCADA), energy management systems, wireless mesh networks
and other technologies, power-line carrier communications, and fiber-
optics. Integrated communications will allow for real-time control, information,
and data exchange to optimize system reliability, asset utilization, and security.
 Sensing and measurement: core duties are evaluating congestion and grid
stability, monitoring equipment health, energy theft prevention, and control
strategies support. Technologies include advanced microprocessor meters (smart
meter) and meter reading equipment, wide-area monitoring systems, (typically
based on online readings by Distributed temperature sensing combined with Real
time thermal rating (RTTR) systems), electromagnetic signature
measurement/analysis, time-of-use, and real-time pricing tools, advanced switches
and cables, backscatter radio technology, and Digital protective relays.
 Smart meters.
 Phasor measurement units. Many in the power systems engineering community
believe that the Northeast blackout of 2003 could have been contained to a much
smaller area if a wide area phasor measurement network had been in place.

[25]
 Distributed power flow control: power flow control devices clamp onto existing
transmission lines to control the flow of power within. Transmission lines enabled
with such devices support greater use of renewable energy by providing more
consistent, real-time control over how that energy is routed within the grid. This
technology enables the grid to more effectively store intermittent energy from
renewables for later use.
 Smart power generation using advanced components: smart power generation is a
concept of matching electricity generation with demand using multiple identical
generators which can start, stop and operate efficiently at chosen load,
independently of the others, making them suitable
for baseload and peaking power generation. Matching supply and demand,
called load balancing,[20] is essential for a stable and reliable supply of electricity.
Short-term deviations in the balance lead to frequency variations and a prolonged
mismatch results in blackouts. Operators of power transmission systems a charged
with the balancing task, matching the power output of all the generators to the
load of their electrical grid. The load balancing task has become much more
challenging as increasingly intermittent and variable generators such as wind
turbines and solar cells are added to the grid, forcing other producers to adapt
their output much more frequently than has been required in the past. The first
two dynamic grid stability power plants utilizing the concept have been ordered
by Elering and will be built by Wärtsilä in Kiisa, Estonia (Kiisa Power Plant).
Their purpose is to "provide dynamic generation capacity to meet sudden and
unexpected drops in the electricity supply." They are scheduled to be ready during
2013 and 2014, and their total output will be 250 MW.
 Power system automation enables rapid diagnosis of and precise solutions to
specific grid disruptions or outages. These technologies rely on and contribute to
each of the other four key areas. Three technology categories for advanced control
methods are distributed intelligent agents (control systems), analytical tools
(software algorithms and high-speed computers), and operational applications
(SCADA, substation automation, demand response, etc.). Using artificial
intelligence programming techniques, the Fujian power grid in China created a
wide area protection system that is rapidly able to accurately calculate a control
strategy and execute it. The Voltage Stability Monitoring & Control (VSMC)

[26]
 software uses a sensitivity-based successive linear programming method to
reliably determine the optimal control solution.

 IT COMPANIES DISRUPTING THE ENERGY MARKET.

Smart grid provides IT-based solutions which the traditional power grid is lacking. These
new solutions pave the way of new entrants that were traditionally not related to the energy
grid. Technology companies are disrupting the traditional energy market players in several
ways. They develop complex distribution systems to meet the more decentralized power
generation due to microgrids. Additionally is the increase in data collection bringing many
new possibilities for technology companies as deploying transmission grid sensors at a user
level and balancing system reserves. The technology in microgrids makes energy
consumption cheaper for households than buying from utilities. Additionally, residents can
manage their energy consumption easier and more effectively with the connection to smart
meters. However, the performances and reliability of microgrids strongly depend on the
continuous interaction between power generation, storage and load requirements. A hybrid
offering combining renewable energy sources with storing energy sources as coal and gas is
showing the hybrid offering of a microgrid serving alone.

 Governments, utilities and manufacturers are putting more emphasis on smart grid
technologies and digitalisation.
The digital revolution in the economy is also impacting the electricity sector. More and more
governments, utilities and manufacturers are embracing digital technologies, from
deploying hardware assets such as smart meters, digital
substations and smart EV charging infrastructure to using software solutions such as artificial
intelligence, digital twins, dynamic line rating and blockchain technology. 

After the Government of India successfully advanced smart grid deployment and mobilised

investments of ~USD 300 million through its National Smart Grid Mission (launched in
2015), in 2021 it introduced a Revamped Distribution Sector Scheme at a cost of more than
USD 40 billion and gross budgetary support of more than USD 10 billion.  

As part of stimulus measures for economic recovery from the Covid-19 crisis, the scheme

aims to improve power supply quality and reliability for consumers through a financially
sustainable and operationally efficient distribution sector. It provides financial support to
upgrade distribution infrastructure with innovative solutions such as pre-paid smart

[27]
metering and artificial intelligence, machine learning and blockchain technology to help
distribution companies reduce distribution losses and improve demand forecasting to better
integrate renewable energy. 

European and US utilities with ambitious strategic plans to become

digital companies lead the way in spending, innovation and deployment for smart electricity
networks. For instance, the European utilities Enel and Iberdrola recently established new
platforms and hubs. Enel launched Network Digital Twin, a digital platform that creates up-
to-date and accurate virtual replicas of physical power networks and their components and
system dynamics, allowing for better network operation and design, integration of distributed
energy resources and workforce management. Meanwhile, Iberdrola created the Global Smart
Grids Innovation Hub, a global innovation and knowledge centre that aims to be a world
reference for smart grids. The centre acts as a platform to stimulate innovation, combining the
company's technological capacities with those of its collaborators: suppliers, universities,
technology centres and startups. 

In 2020, the State Grid Corporation of China also announced plans to invest ~CNY 25 billion

(USD 3.5 billion) in digital infrastructure to support tech-based projects as part of efforts to
revitalise the economy. In 2021, together with China’s National Development and Reform
Commission, it announced a pilot project to develop a green-energy trading platform based
on blockchain technology.  

Electricity network manufacturers such as Siemens, General Electric and Hitachi Energy

have made digital technologies the core of their business. For instance, in 2021 Hitachi
Energy launched its SVC Light Enhanced Solution, which combines two grid stabilisation
technologies – STATCOM and supercapacitor-based energy storage – to provide both active
and reactive power to transmission systems. Using grid-forming controls, this digital
technology remedies increasing inertia shortages and rising demand for power
quality, allowing greater renewable energy integration as well as power grid stabilisation.

 Recovery and expansion plans are set to reverse the declining investment trend.
Electricity grid investments are expected to reach ~USD 290 billion in 2021, recovering from
2020 and even surpassing the 2019 level of ~USD 270 billion. Sustaining the

[28]
falling trend of the previous four years, most of the 2020 decline stemmed from lower
investments in China and several emerging markets and developing economies (EMDEs),
which more than outweighed increases in the United States and Europe. However, the
considerable expansion plans expected for 2021 are likely to reverse this trend. 

In China, most of the drop in 2020 was in the electricity distribution sector, as targets for

rural power grid expansion had been met and focus shifted to transmission, which represents
a smaller share of grid investments. However, with 2060 net zero goals on the horizon as well
as an ambitious 14th Five-Year Plan for renewables, state-owned
utilities’ impressive expansion plans are expected to trigger investments.  

The pandemic further weakened the financial situation of some distribution companies

in EMDEs, which had already been undermined by governments’ limited fiscal
capacities and higher financing costs, particularly state-owned utilities that had taken on
greater debt in recent years. Investments in electricity networks in these countries fell 15% in
2020, to ~60% of the 2016 level.

Spending cuts also affected smart grids and digital devices, especially those benchmarked

against other regions. For instance, overall EMDE investments in smart meters totalled less
than USD 2 billion per year over the past five years, while advanced economies spent over
USD 10 billion annually. 

In Europe, grid expansion plans for 2021-2030 provide the foundation for increased

investment, supported by economic recovery schemes. While the European
Commission’s 2030 climate ambition plan released in September 2020 foresees annual grid
investments of ~USD 70 billion during 2021-2030 (more than double 2011-
2020 spending), investments are set to be even higher owing to its July 2021 Fit for 55 plan,
which aims for emissions in 2030 to be 55% lower than in 1990 (compared with the previous
plan’s 40% reduction). 

In the United States, the proposed American Jobs Plan contains measures to build a more
resilient electricity transmission system as part of the drive to achieve carbon-free
electricity generation by 2035. The scheme includes creation of a targeted investment tax

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credit and efforts to better leverage existing rights of way along roads and railways for high-
voltage lines.  

These kinds of measures underline the broader importance of policies and

regulations to mobilise network investments by incentivising connections to the grid,
especially for new wind and solar projects; simplifying procedures to make public land
available for electricity infrastructure; speeding up response times; and rethinking
authorisation procedures for minor categories of projects.

 BENEFITS OF SMART GRID DEPLOYMENTS.

Several groups of the society are provided with multiple benefits through the Smart Grid
implementations. Such include utility, customers and the regulators while some of the
benefits include:
 Reduction of T&D losses.
 Peak load management, improved QoS and reliability.
 Reduction in power purchase cost.
 Better asset management.
 Increased grid visibility and self-healing grids.
 Renewable integration and accessibility to electricity.
 Increased options such as ToU tariff, DR programs, net metering.
 Satisfied customers and financially sound utilities etc.

SMART ENERGY SYSTEMS :

Global societies have reached a tipping point. Addressing the climate crisis
necessitates a rapid transition away from fossil fuel power generation, and towards
decarbonised and sustainable alternatives. The technologies are ready. What is now
needed is a collective strategy to deploy them at the required scale with minimal
economic disruption. Wireless connectivity is a key component in this carbon-neutral
transition through enabling new Smart Energy Systems (SES). SES are a new
solution, which combine energy generation and storage technologies with ‘intelligent’
applications, controlling and optimising their usage. They will be key to meeting

[30]
 targets from companies and governments increasingly aiming for net zero emissions
by 2050 or sooner. In the total energy landscape, renewables (including biofuels and
hydropower) currently account for just 11 per cent of global consumption, with an
additional 5 per cent coming from nuclear power, leaving an 84 per cent fossil-fuel
gap that needs to be filled by renewable technologies.

The question of scale and speed is one of the most pressing as the new technologies
being put to use in the energy sector need to become the bulk of the generation
capacity. Thankfully, mobile networks and the new generation of AI-based cloud
computing are well-placed to enable this rapid transition. The combination of mobile
networks and powerful cloud computing environments is vital because of their ability
to aggregate emerging renewable energy systems into an asset to rival the gigawatt-
scale of a nuclear power plant. By using wireless connectivity to combine several
solar farms, or thousands of homes with small-scale renewables or storage systems,
using cloud computing to manage them, new SES can be put to work in
decarbonisation efforts.

This will be achieved through three key steps:

• First, the lifetime output of renewable power assets can be maximised through
making real-time decisions to optimise performance based on technical characteristics
and meteorological data.

• Second, the consumption of end-use devices can be minimised and shifted to

periods when there is surplus renewable power generation.

• Finally, all components can be aggregated together, along with energy storage
technologies, to create decentralised energy systems of maximum efficiency and
minimum cost.

 HOW TO BUILD A SMART ENERGY SYSTEM.

The process of joining up lots of small components into an aggregated SES is not an
easy feat. There are many moving parts to connect, as well as central business and

[31]
government applications to configure. Mobile networks are a vital component,
allowing these assets to connect in the field, with cloud-based computing
environments acting as coordinators.

Examples of these SES devices might be a lithium-ion battery storage system

designed to store energy from a nearby solar farm; a group of homes that have
installed solar panels on their roofs; or a fleet of electric vehicles that will charge in a
coordinated fashion when renewable power generation is high.

The stakeholders involved in SES need to know their responsibilities, and each
participant needs to know which other partners to pay, or customers to bill.
Ultimately, if SES are going to be commercial successes, all the partners need to
know their roles and obligations in creating the optimum environment for their
operation.

All of the different components need to be connected and then orchestrated, using
wireless connectivity to link them to the internet where they can then be configured
inside an application running in a cloud computing environment. New AI-based
technologies will be especially useful in cloud applications, which will be put to work
optimising the usage and revenue generation of SES deployments.

 Solar farms.

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 Lithium-ion battery storage.

 Co-ordinated vehicle charging.

 Smart homes with solar panels.

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 THE FOUNDATION OF SMART ENERGY SYSTEMS.

No two SES will be identical, however there are three fundamental components
nearly all of them will include. This section will explore these foundations, which are
Wireless Connectivity, Cloud Computing, and Platforms.

 Wireless Connectivity :

Wireless Connectivity has always been an enabling technology; it helps create

a foundation new businesses can be built upon. Sometimes, enablement means
the creation of a completely new application, such as the app industry which
has grown up around smartphones. Other times, it means improving existing
applications – enabling new efficiencies or revenue streams.

The energy sector is one of the best examples of the latter, and there are some
very convincing examples. Broadly, wireless connectivity has facilitated the
deployment of new renewable energy generation systems. It has laid the
groundwork for a new generation of electric vehicles and the required payment
marketplace surrounding them, and is gearing up to connect all manner of
buildings to a dynamic energy grid.

Data generated by smartphones, in-home appliances, business equipment,

vehicles, cameras, and drones will power the next industrial revolution – or in
this case, an environmental revolution. Managing tens or hundreds of
thousands of devices is going to be immensely complicated if they are
connected via dozens to hundreds of different physical networks carrying vast
volumes of data.

If a utility or energy management firm needs to use meters to monitor live

usage or wants to be able to control appliances at their customers’ premises,
relying on all those different networks is a significant operational risk. Using
mobile networks can solve the problem, connecting these devices directly to a
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 Mobile Network Operator (MNO) without needing to rely on customers,
building owners, or governments as bottlenecks.

 The advantage of wireless over wired :

In many examples, the case can be made that wireless connections could be
replaced by wired (fixed) connections. However, in the vast majority of
these cases the cost of laying these cables and visiting every single
installation would quickly undermine the business case. Also, using a
wireless technology almost always translates to a simpler installation, where
a technician can easily fit a new smart meter. This then relies on the wide-
area wireless connectivity, rather than trying to rely on the WiFi connection
in a customer home or hoping the end-user won’t accidentally unplug it. For
mobile assets, wired connections are not a viable alternative. Electric
vehicles (EVs) can be major assets to energy grids, as well as
decarbonisation initiatives, but they also need to be managed at scale.
Through the move towards being able to direct EVs to the best charging
station based on travel data and usage patterns, these EVs can become
mobile batteries to store surplus renewable energy. As most cars are parked
for upwards of 95 per cent of their lifetime,2 they can be seen as micro
power stations, feeding electricity into the local grid when needed. These
applications require connectivity that can travel with the asset, can be
sufficiently ruggedised and will last the life of the asset.

 Cloud Computing :

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 Cloud Computing is the new normal for enterprises thanks to the flexibility of
its pricing schemes. It allows a customer to only pay for exactly the amount of
computing power and supporting software, without risking wasted investments.

Instead of having to purchase, install, and support this computing power, the
end-users can now pay for it as a service. Because of this flexibility, Cloud
Computing enables customers to make use of new computing technologies,
particularly AI-based data processing, leasing it on a very short-term basis.

This is a similar dynamic to offloading the ‘cost’ of running a private wireless

network to an MNO and enjoying the easier operational load that comes with
the decision. MNOs are already becoming Cloud Computing providers and are
looking for new services to add to their offerings, leveraging the distributed
networking facilities that form their communication networks.

This is a similar dynamic to offloading the ‘cost’ of running a private wireless

network to an MNO and enjoying the easier operational load that comes with
the decision. MNOs are already becoming Cloud Computing providers and are
looking for new services to add to their offerings, leveraging the distributed
networking facilities that form their communication networks.

 THE ROLE OF SMART ENERGY SYSTEMS IN 1.5 DEGREES.

To prevent climate change from causing irreversible damage to the planet, the
Intergovernmental Panel on Climate Change has stated the world needs to reach net
zero carbon emissions by 2050. This necessitates global collaboration between
industry and policymakers, and without hesitation. To achieve this goal, global energy
demand needs to fall at a rate of at least 0.19 per cent per year from current levels,
while the penetration of renewables is pushed above 85 per cent of production by
2050.

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 For many industries, including transport and heating, the best way to do this is
through electrification, with electricity needing to account for at least 49 per cent of
global energy demand by 2050 - hitting interim targets of 29 per cent and 38 per cent
in 2030 and 2040 respectively. This rise in electricity demand has to be satisfied
through renewable technologies, with wind and solar power currently providing the
lowest cost to decarbonisation and already undercutting fossil fuel generation in most
parts of the world. These technologies depend on weather patterns, and once
penetration of renewables surpasses 30 per cent in the electricity mix of different
regions, starting in Europe, it will be essential to deploy SES to facilitate them.

This will serve the purpose of continuing the reduction in energy intensity in the
power sector, which currently sits at 475 tons per TWh on average but is much higher
in countries like India (700 tons per TWh). A large part of this reduction will come
from preventing an overbuild of capacity and maximising the output of renewables
assets. To maximise the benefits from SES, they must be deployed in parallel with
renewable projects through an international electrification process. In an optimum
scenario, all new renewables projects would be fitted with infrastructure that will
allow them to participate in a globalised smart grid system.

Rather than the 67 per cent penetration in 2050 expected through market forces alone
(see page 53), support from policymakers for SES and the wireless communication
infrastructure required to facilitate it will need to drive penetration of SES to 13 per
cent by 2030, 52 per cent by 2040 and then 86 per cent in 2050 as the system starts to
mature. By facilitating this, SES will prevent an overbuild of capacity worth
16,000TWh of annual generation, which based on today’s electricity prices will save
approximately $1.9 trillion per year. Perhaps more importantly, compared to today’s
energy mix, it will save emissions of 7.7 billion tons of CO2, making it responsible
for over 23 per cent of global decarbonisation. This will also see a rapid
transformation from utilities into the digital age as they expand their operations from
power to include electrified transport and the production and distribution of green
hydrogen, which will be crucial in decarbonising the remaining portion of non-
electrified primary energy demand.

 SMART ENERGY SYSTEMS AND DECARBONISATION.

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SES will allow us to provide the global population with low-cost, zero-carbon
electricity. Each SES installation helps reduce the amount of conventional energy
generation capacity that needs to be created by getting more out of the existing
capacity through usage and load optimisation.

Once solar and wind power reaches a combined 20 per cent in a country’s electricity
generation mix, as they have in many countries, technologies such as smart grids and
energy storage become mandatory to prevent wastage. Smart grids alone can help
push the penetration of renewables from 20 per cent to 70 per cent,41 and become
noticeably effective once renewables penetration surpasses 15 per cent.42 Otherwise,
utilities are required to have gas-fired peaker plants on standby in case of a sudden
shortfall in renewable generation or surge in demand.

On a microgrid level, by maximising generation from renewables and optimising

demand patterns to create a balanced grid, the efficiency of the power sector can be
improved by as much as 35 per cent. Using today’s best available technologies and
projections for future energy mixes, SES enable an additional 25 per cent of the
renewable energy generated to be used in the grid-load.

On a microgrid level, by maximising generation from renewables and optimising

demand patterns to create a balanced grid, the efficiency of the power sector can be
improved by as much as 35 per cent. Using today’s best available technologies and
projections for future energy mixes, SES enable an additional 25 per cent of the
renewable energy generated to be used in the grid-load.

While the early penetration of SES supported renewable deployments will involve
advanced metering infrastructure (AMI), advances in Cloud Computing and AI will
result in optimised electricity distribution – reducing renewable oversupply, and
forcing carbon-intensive methods of generation into early redundancy.

The primary benefit of this enabling technology comes into play as renewables
become a larger part of the global energy mix. The risk of a disparity between supply
and demand increases significantly as economies become more reliant on weather
patterns for their electricity instead of on traditional coal or gas plants.

[38]
 Despite the increased need for SES, global investment in electricity grids has fallen
for 3 consecutive years, falling 7 per cent between 2018 and 2019 to just under $275
billion per year. Digital technologies accounted for around 15 per cent of this.
Transmission grids remain almost entirely centralised and nearly all SES projects are
still in the pilot phase while countries continue to evaluate how different technologies
can maximise energy utilisation. However, by 2023 it is expected 65 per cent of
power, gas and water companies will have invested in edge analytics and Cloud
Computing to optimise their assets as SES start to materialise.

Despite the increased need for SES, global investment in electricity grids has fallen
for 3 consecutive years, falling 7 per cent between 2018 and 2019 to just under $275
billion per year. Digital technologies accounted for around 15 per cent of this.
Transmission grids remain almost entirely centralised and nearly all SES projects are
still in the pilot phase while countries continue to evaluate how different technologies
can maximise energy utilisation. However, by 2023 it is expected 65 per cent of
power, gas and water companies will have invested in edge analytics and Cloud
Computing to optimise their assets as SES start to materialise.

While bodies like the EU set out directives for a continent-wide target to reach net
zero emissions by 2050, the success of SES implementation will naturally fall to
national policy. Countries like the Netherlands highlight how considerations must be
made for a tailored approach based on national objectives

 SCALING SMART ENERGY SYSTEMS FOR GLOBAL IMPACT.

In terms of market development and smart grid penetration, the Netherlands is

roughly 3 years ahead of the global average. Using the same approach to development
across the global energy landscape, SES can be deployed to significantly reduce
global emissions from current levels of 33,100 MTons per year.

Unlike in the Netherlands, the current trajectory will see global energy demand
increase by approximately 50 per cent by 2050, driven by population growth and

[39]
urbanisation in developing economies. Electricity demand will nearly double in this
timeframe and the share of the power sector in global demand is set to rise to around
21 per cent. With renewable technologies accounting for the bulk of this growth, the
penetration of SESwill rise from 0.1 per cent today to approximately two-thirds of
electricity transmission.

With the global average for emission intensity from electricity sitting around 475
tons per TWh, this penetration would save 8,500TWh of electricity, Scaling Smart
Energy Systems for global impact which would otherwise be wasted, and over 4.0
million tons of CO2 every year – more than that released by the whole of Europe.
This approach, however, is conservative and does not align itself with the global
ambition to limit climate change to 1.5°C.

[40]
 METHODOLOGY

The challenge of integrating fluctuating power from renewable energy sources in the
electricity grid by the use of smart grids cannot be looked upon as an isolated issue but
should be seen as one out of various means and challenges of approaching sustainable energy
systems in general. Therefore, electricity smart grids must be coordinated with the utilisation
of renewable energy being converted into other forms of carriers than electricity including
heat and biofuels as well as energy conservation and efficiency improvements, such as CHP
and improved efficiencies e.g. in the form of fuel cells. All such measures have the potential
to replace fossil fuels or improve the fuel efficiency of the system.

However, they also add to the electricity balancing problem and contribute to the excess
electricity production and thereby to the need for electricity smart grids. The long-term
relevant systems are those in which such measures are combined with energy conservation
and system efficiency improvements. This article illustrates why electricity smart grids
should be seen as part of overall smart energy systems and emphasises the inclusion of
flexible CHP production in the electricity balancing and grid stabilisation. Furthermore, it
highlights some recent developments in the Danish electricity market operation.

An electricity disruption such as a blackout can have a domino effect—a series of failures
that can affect banking, communications, traffic, and security. This is a particular threat in the
winter, when homeowners can be left without heat. A smarter grid will add resiliency to our
electric power System and make it better prepared to address emergencies such as severe
storms, earthquakes, large solar flares, and terrorist attacks. Because of its two-way
interactive capacity, the Smart Grid will allow for automatic rerouting when equipment fails
or outages occur. This will minimize outages and minimize the effects when they do happen.
When a power outage occurs, Smart Grid technologies will detect and isolate the outages,
containing them before they become large-scale blackouts.

The new technologies will also help ensure that electricity recovery resumes quickly and
strategically after an emergency—routing electricity to emergency services first, for example.

[41]
In addition, the Smart Grid will take greater advantage of customer-owned power generators
to produce power when it is not available from utilities. By combining these "distributed
generation" resources, a community could keep its health center, police department, traffic
lights, phone System, and grocery store operating during emergencies. In addition, the Smart
Grid is a way to address an aging energy infrastructure that needs to be upgraded or replaced.
It’s a way to address energy efficiency, to bring increased awareness to consumers about the
connection between electricity use and the environment. And it’s a way to bring increased
national security to our energy System—drawing on greater amounts of home-grown
electricity that is more resistant to natural disasters and attack.

The changing landscape of generation and customer-owned technologies is fundamentally

altering the electric power flows and physical phenomena that grid components were
designed to accommodate. The pace of grid modernization and system changes demand
hardware solutions that are more dynamic, adaptable, and robust. The development and
deployment of next-generation grid components, particularly power electronics
technologiesthat incorporate solid-state components, will play a critical role in enabling
future grid requirements.

Devices, such as solid-state transformers and power flow controllers, can be used in strategic
locations to provide instantaneous control over the direction and magnitude of power flow,
which will significantly improve the capability and flexibility of the electric grid. New
planning strategies are required to integrate power electronics with legacy grid infrastructure;
for example, regulators and utilities, with assistance from the Department, are now in the
process of addressing how to best deploy smart inverters, which are used to integrate solar
PV systems with the utility grid.

In addition, specific research needs are focused on improving the performance, applicability
and cost of these grid components:

• Improving the performance of current designs by leveraging advances in new materials,

such as wide-bandgap semiconductor materials.

• Developing modular and scalable designs, leading to greater standardization and allowing
for more cost-effective capacity expansion, as standardized designs do not exist for many grid
components. • Providing local intelligence with embedded sensors, data processing, and
communications to enable real-time monitoring and adaptive capabilities.

[42]
 • Incorporating cyber and physical security measures into the design of each component,
rather than added as an afterthought.

• Ensuring customer data privacy given the increasing use and deployment of sensors and the
vast amounts of consumer data generated, collected, and analyzed.

Electric energy storage technologies are characterized by their capability to consume, store,
and discharge electric power when needed. These technologies can provide various benefits,
such as supporting balancing and ramping requirements, improving the economic dispatch of
resources, enhancing power quality and stability, and deferring infrastructure investments.
They can also be deployed by customers for backup power and more optimal use of
generating assets. As variability and uncertainty increase, a substantial deployment of energy
storage is anticipated to enhance system flexibility and control capabilities.

R&D is required in several areas to address cost and technical performance issues, as well as
to promote industry acceptance. Targeted research is needed in the development of improved
materials and in systems engineering approaches to resolve key technology cost and
performance challenges. Examination of degradation and failure mechanisms, the
development of mitigation strategies, and accelerated life testing will help to validate the
reliability and safety of energy storage systems. Finally, the development of industry and
regulatory agency accepted standards for siting, grid integration, procurement, and
performance evaluation will better support the demonstration and deployment in utility
systems.

The electricity industry will need a cross-disciplinary workforce that can comprehend,
design, and manage cyber-physical systems, as well as apply risk management, advanced
modeling and behavioral science skills. The evolving demands on the electricity industry are
causing several workforce challenges for the industry, including a skills gap for deploying
and operating newer technologies and changes occurring during a period when the industry is
facing high levels of retirements.

Utility executives have reported that replacing their aging workforce continues to be a top
priority. This issue has improved somewhat over the past ten years. However, the retention of
qualified and diverse candidates is a challenge many now see as outpacing the issue of an
aging workforce, as skills requirements are changing rapidly due to grid modernization. The
application of digital technology, in particular, is requiring a greater number of highly
technical workers and engineers that can build, manage and protect these systems. As a
[43]
result, the electric industry is continuing to face challenges in attracting, recruiting, and hiring
qualified applicants.

One of the significant challenges is filling gaps in the talent pipeline. Training programs and
schools that produce the applicant pool still do not reflect the gender and racial diversity in
the country. While the long-range prediction of workforce shortages has improved
considerably in the past decade, some job classifications, engineers and technicians,
especially, continue to face shortages of entry-level and experienced workers. Sixty-eight of
the firms surveyed in a study conducted for the Department cited insufficient qualifications,
certifications, or education and lack of experience, training, and technical skills as the most
reported reasons for difficulty in hiring competent workers. One of the key skills needed is in
cybersecurity. Cisco reports that security professionals cite budget, interoperability, and
personnel as their key constraints when managing security. The lack of trained personnel was
identified as a key and growing challenge to adopting advanced security processes and
technology across the industries they serve, including the electric power industry.

Grid operations grow increasingly complex, while the frequency, scale, and sophistication of
cyber threats to the grid are rapidly increasing. Both factors create a growing need for
advanced digital sensing and control capabilities. A modern grid requires rapid sensing, fast
and predictive analytics, and real-time modeling to make automated decisions; these same
capabilities can improve cyber attack detection and response.

The challenge today is building innovative cybersecurity capabilities into smart grid devices
and networks as they evolve, while anticipating future grid scenarios and designing next-
generation resilient and adaptive control systems. Federal agencies and the energy industry
have been working in close partnership since 2005 to reduce the risk of energy disruptions
from a cyber attack. Significant work has been done by this public-private partnership to
develop cybersecurity standards for smart grid technologies, develop tools and frameworks
that bolster utility cybersecurity capabilities,share cyber risk information, and conduct
advanced R&D for energy delivery systems—but more is needed, particularly as cyber
threats continue to evolve.

For more than a decade, DOE’s Cybersecurity for Energy Delivery Systems (CEDS)
program has funded a diverse portfolio of cybersecurity R&D led by partnerships of industry,
cybersecurity vendors, academia, and national laboratories. To date, CEDS has delivered
more than 38 products, tools, and technologies to help secure critical cyber systems and

[44]
networks, some of which are now in place at thousands of U.S. utilities. As utilities deploy
new smart grid devices and networks, innovative and incremental cybersecurity technologies
are needed that can prevent, detect, and mitigate a growing range of threats while respecting
the needs of existing, legacy systems.

More importantly, advanced RD&D is needed that will build cyber resilience into the next
generation of energy management and control systems. CEDS R&D today focuses on
anticipating future energy sector attack scenarios and designing cybersecurity into emerging
technologies, such as cloud networks for utility data analytics, distribution-level energy
management systems that will coordinate microgrid operations, and secure synchrophasor
systems to enable real-time control. R&D projects are also examining how to design future
power systems and componentsthat automatically detect, reject, or withstand a cyber incident,
adapting as needed to keep operating even under attack. Several projects are examining future
system designs that recognize and refuse to take any action that does not support grid
stability, which limits the damage an attacker can create even if they successfully infiltrate a
utility network.

The energy industry will also need advanced tools, standards, and guidelines to build and
operate secure smart grid systems. Over the past decade, DOE has worked with the energy
industry to design the Cybersecurity Capability Maturity Model (C2M2), a tool that utilities
can use to assess and prioritize improvements to their cybersecurity capabilities. DOE also
worked with NIST in developing the Cybersecurity Framework, a voluntary framework that
aligns with the C2M2, which utilities can use to design or improve their cyber risk
management program.

While these tools help utilities strengthen their cyber practices, continued efforts are needed
to develop strong cybersecurity standards that utilities and vendors can use in designing and
building smart grid networks and systems. Since 2010, DOE has supported NIST and energy
industry partners in developing cybersecurity guidelines for smart grid vendors and utilities,
but additional work is needed as technologies advance and evolve.

[45]
 FINDINGS

In a future energy system, the complex network of interconnected forms of energy

production, distribution and consumption will continue to grow and will offer a wide variety
of new possibilities. It will also involve new players and new roles for old players. This
creates new opportunities, businesses and markets. But it can also create disruption,
complexity and confusion. VTT can help you simulate new conditions, reconsider your role
in the new energy system and navigate through the transition. We have comprehensive
IntelligentEnergy testbed, energy living lab in our new office building and various modelling
and simulation tools to help you simulate new energy solutions.

Challenges to the future success of the smart grid

come from many fronts, such as consumer buy-in:
consumers have to see real savings and efficiency
improvements; better regulation: governmental
control must stay up to date technologically and in
touch with consumers; cost justification; Smart Grid
components must be individually as well as
systemically cost effective; education: utilities,
service companies and universities must produce
educated consumers as well as a new generation of
electrical engineer savvy in computer sciences and
systems engineering; and new inventions and
technologies must be easily adopted and adapted

11
into the Smart Grid since it will evolve over the
next 20 to 30 years.
Challenges to the future success of the smart grid
come from many fronts, such as consumer buy-in:
consumers have to see real savings and efficiency
improvements; better regulation: governmental
control must stay up to date technologically and in
touch with consumers; cost justification; Smart Grid
components must be individually as well as
systemically cost effective; education: utilities,

[46]
service companies and universities must produce
educated consumers as well as a new generation of
electrical engineer savvy in computer sciences and
systems engineering; and new inventions and
technologies must be easily adopted and adapted

11
into the Smart Grid since it will evolve over the
next 20 to 30 years.
Challenges to the future success of the smart grid
come from many fronts, such as consumer buy-in:
consumers have to see real savings and efficiency
improvements; better regulation: governmental
control must stay up to date technologically and in
touch with consumers; cost justification; Smart Grid
components must be individually as well as
systemically cost effective; education: utilities,
service companies and universities must produce
educated consumers as well as a new generation of
electrical engineer savvy in computer sciences and
systems engineering; and new inventions and
technologies must be easily adopted and adapted

11
into the Smart Grid since it will evolve over the
next 20 to 30 years.
Challenges to the future success of the smart grid
come from many fronts, such as consumer buy-in:
consumers have to see real savings and efficiency
improvements; better regulation: governmental
control must stay up to date technologically and in
touch with consumers; cost justification; Smart Grid
components must be individually as well as
systemically cost effective; education: utilities,
service companies and universities must produce
educated consumers as well as a new generation of
electrical engineer savvy in computer sciences and
systems engineering; and new inventions and
technologies must be easily adopted and adapted

11
into the Smart Grid since it will evolve over the
next 20 to 30 years.
Challenges to the future success of the smart grid
come from many fronts, such as consumer buy-in:
consumers have to see real savings and efficiency
improvements; better regulation: governmental

[47]
control must stay up to date technologically and in
touch with consumers; cost justification; Smart Grid
components must be individually as well as
systemically cost effective; education: utilities,
service companies and universities must produce
educated consumers as well as a new generation of
electrical engineer savvy in computer sciences and
systems engineering; and new inventions and
technologies must be easily adopted and adapted

11
into the Smart Grid since it will evolve over the
next 20 to 30 years.
Challenges to the future success of the smart grid
come from many fronts, such as consumer buy-in:
consumers have to see real savings and efficiency
improvements; better regulation: governmental
control must stay up to date technologically and in
touch with consumers; cost justification; Smart Grid
components must be individually as well as
systemically cost effective; education: utilities,
service companies and universities must produce
educated consumers as well as a new generation of
electrical engineer savvy in computer sciences and
systems engineering; and new inventions and
technologies must be easily adopted and adapted

11
into the Smart Grid since it will evolve over the
next 20 to 30 years.
Challenges to the future success of the smart grid
come from many fronts, such as consumer buy-in:
consumers have to see real savings and efficiency
improvements; better regulation: governmental
control must stay up to date technologically and in
touch with consumers; cost justification; Smart Grid
components must be individually as well as
systemically cost effective; education: utilities,
service companies and universities must produce
educated consumers as well as a new generation of
electrical engineer savvy in computer sciences and
systems engineering; and new inventions and
technologies must be easily adopted and adapted

11
into the Smart Grid since it will evolve over the
next 20 to 30 years.

[48]
Challenges to the future success of the smart grid
come from many fronts, such as consumer buy-in:
consumers have to see real savings and efficiency
improvements; better regulation: governmental
control must stay up to date technologically and in
touch with consumers; cost justification; Smart Grid
components must be individually as well as
systemically cost effective; education: utilities,
service companies and universities must produce
educated consumers as well as a new generation of
electrical engineer savvy in computer sciences and
systems engineering; and new inventions and
technologies must be easily adopted and adapted
Challenges to the future success of the smart grid
come from many fronts, such as consumer buy-in:
consumers have to see real savings and efficiency
improvements; better regulation: governmental
control must stay up to date technologically and in
touch with consumers; cost justification; Smart Grid
components must be individually as well as
systemically cost effective; education: utilities,
service companies and universities must produce
educated consumers as well as a new generation of
electrical engineer savvy in computer sciences and
systems engineering; and new inventions and
technologies must be easily adopted and adapted

Electricity theft still is a big problem for energy companies around the world. Despite
electricity being made accessible to most areas around the world today, many continue to find
ways to steal electricity for their personal use.

According to statistics, electricity theft cost around US$ 96 million a year globally. And this
figure does not include other expenditures energy companies face in solving the problem.
The US Energy Information Administration (EIA) estimates that electricity transmission and
distribution (T&D) losses were about 5% of the electricity transmitted and distributed in the
United States in 2016-2020.

In most cases, electricity theft often happens with the tampering of the meters. However,
some cases have now gone beyond that. For example, bitcoin mining syndicates have been
reported to steal electricity to mine bitcoins. In Malaysia, the government announced
electricity theft by bitcoin mining syndicates causing losses of up to US$ 550 thousand
between 2018 and 2021.

[49]
Fortunately, technology is enabling electricity theft to be detected much faster now. Today,
energy companies are relying more on AI and smart grids to not only detect electricity theft
but also solve the problem much faster.

Smart grids are electric grids with automation, communication, and IT systems that can
monitor power flow from points of generation to points of consumption. The technology is so
powerful that it can even detect power consumption down to appliances used as well. Smart
grids can also control the power flow or curtail the load to match generation in real-time or
near real-time.

Most countries around the world have already upgraded their electricity grid systems to smart
grids. In fact, In 2019, US$ 271 billion was spent on smart grids with US$ 123 billion going
towards power equipment. Smart meter investments amounted to US$ 21 billion. The Asia
Pacific will see the fastest growth and is expected to become the largest market for smart grid
technology.

While smart grids promote sustainability in energy, they can also help detect energy theft. As
the grid can detect power consumption, it is able to report any anomalies in energy usage. For
example, a sudden surge in any consumption in a residential area of a factory. The system
will highlight the increased consumption which is not reflected in the bill for that particular
building or area.

The Smart Grid will consist of millions of pieces and parts—controls, computers, power
lines, and new technologies and equipment. It will take some time for all the technologies to
be perfected, equipment installed, and systems tested before it comes fully on line. And it
won’t happen all at once—the Smart Grid is evolving, piece by piece, over the next decade or
so. Once mature, the Smart Grid will likely bring the same kind of transformation that the
Internet has already brought to the way we live, work, play, and learn.

The evolution of digital technology, including advances in computing and networking

capabilities, will ultimately transform the way the electric grid is designed, operated, and
connected with other infrastructures. The transition to a more integrated and distributed grid
is occurring not only through the application of digital technology, providing intrinsic value
to utilities, but also by unpredictable patterns of customer behavior and third parties driving
the adoption of DER at the grid edge. As a result, we can anticipate greater levels of

[50]
variability and uncertainty with regard to both managing energy flows and adapting to the
integration of new devices and systems.

Advanced smart grid capabilities should result in several performance improvements. These
include both the ability to adaptrapidly and optimally to fast-changing conditions, and to
anticipate them using faster-than-real-time, predictive analysis. Such capabilities will support
risk management approachesto address probabilities and improve resilience. The electric grid
is evolving into an ultra-large-scale systemx90 as it becomes more decentralized and
integrated with a variety of heterogeneous parts, which often have conflicting needs and
objectives. The challenge is to institute the appropriate design considerations and processes
so we can maintain a stable, coherent, and manageable system as it evolves.

Future grid modernization efforts will likely concentrate on designing and demonstrating
highly advanced management and control systems, particularly for the distribution system,
that integrate enormous amounts of data into real-time operational control. With a growing
number of devices and endpoints to manage under tighter timeframes, operators will need
advanced control schemes that can manage more complex and unpredictable loads, dispatch
resources, and incorporate real-time and predictive analyticsthat will permit operators to
make smarter, faster operating decisions that save time, money, and energy and make the grid
more responsive to failures.

[51]
 CONCLUSION

The technologies needed for Smart Energy Systems already exist and are being deployed in
electricity grids around the world. This report has provided case studies in each of the five
main areas of SES and how they can work together.

A new generation of power stations will be created by harnessing abundant renewable

resources through decentralised energy generation, along with fast wide-ranging mobile
networks, together with powerful cloud computing and low-cost battery storage.

There are already many examples of regulations beneficial for the adoption of SES. However,
there should be further concerted efforts to harmonise the approaches different countries and
local governments are taking.

If technology uptake and regulatory reform happen swiftly in the coming years, then SES
will be a major contributor to efforts to decarbonise not only our electricity systems, but also
the global economy as we move away from a reliance on fossil fuels.

This report conveys the status of smart grid deployments across the nation, the capabilities
they provide, and the challenges remaining as we move forward with the modernization of
the electric grid. Over the past decade, utilities have deployed smart grid technologies to
improve the reliability and efficiency of their operations and to better engage utility
customers in the management of energy. However, more recently, we are witnessing the rapid
adoption of DERs, such as photovoltaic systems and energy storage technologies, and
increasing ownership of distributed assets by utility customers and third-party merchants.

The effective integration of the grid with a mixed set of DERS, combined with the potential
for shared ownership of grid services among utilities, customers and merchants, presents a

[52]
greater level of complexity than the grid was originally designed to accommodate. As a
result, we can anticipate a dramatic transformation in the structural and functional aspects of
the grid that will require the advancement and use of digitally-based, smart grid technologies.
This is now occurring where we can see high levels of DER adoption.

Although the adoption of smart grid technology is not occurring at the same rate across the
country, as is appropriate based on local needs for advanced capabilities, one can envision a
trend to a more integrated and distributed electric grid where large-scale DER integration will
occur. In addition, digital technologies will eventually lead to the formation of information
networks that will promote the convergence of the electric grid with other infrastructures,
such as buildings, transportation and telecommunications. Given the billions of dollars spent
annually on upgrading the electric infrastructure, it is vitally important that investments made
today can support an evolving grid for decades to come.

Addressing this challenge will require the application of holistic planning approaches that
consider long-range possibilities and integrate the considerations of utilities, customers, grid
service providers, and technology developers. It will also require the development and
application of technologies that can readily adapt to dynamic conditions, coordinate millions
of devices, and provide secure and resilient operations.

[53]
 REFERENCES

Smart grids: electricity networks and the grid in evolution (i-scoop.eu)

Smart Grid | National Smart Grid Mission, Ministry of Power, Government of

India (nsgm.gov.in)

Smart grid - Wikipedia

Smart Grids – Analysis - IEA

The biggest energy challenges facing humanity - BBC Future

Smart-Energy-Systems-Report.pdf (gsma.com)

AI and smart grids are helping energy companies solve electricity theft
(techhq.com)

Smart Grid: The Smart Grid | SmartGrid.gov

Smart Grid System Report (energy.gov)

[54]