Comparisons between the smart grid and the internet are common, but the analogy is particularly useful when it comes to a critical distinction that both share, namely that there is a difference between products and services and the underlying infrastructure that enables them.
“No company would have built the internet just to sell smart phones,” explained Jochen Kreusel, Global Head of Smart Grids ABB AG in a presentation in the Smart Grids Forum at Hannover Messe 2014.
Similarly, many of the applications envisioned for the smart grid will rely on an infrastructure that providers of these applications or services are not in a position to build. If service providers are expected to coordinate highly distributed resources (e.g., rooftop solar, demand response) in an unbundled retail market as exists in European countries, then a ubiquitous and cost-efficient communication infrastructure is an important pre-requisite.
Kreusel also provided some sobering estimates of just how complex the grid—and particularly the communications and control systems that support it—will become as the current trend toward decentralization continues.
“We could see more than 1.5 million distributed energy resources compared to less than 1,000 power stations today, over 100,000 secondary substations compared to less than 7,000 in the past, and demand response for 40 million households that need to be coordinated” he said. The figures were specific to Germany, but that only served to highlight the scale of change that the power system will undergo.
But the shift to a distributed energy future will not relegate the grid to a secondary role. To the contrary, it will make the grid more important than ever. Rooftop solar, for example, will not be able to ensure a completely autonomous supply of electricity. The grid is a cost-efficient option to provide backup power, but it will also serve as the means for the solar owner to sell excess generation back into the larger network. The grid will enable the distributed energy future.
Kreusel envisioned a power system where a wide variety of market players operate assets that serve to ensure grid stability as they deliver power onto the grid or take delivery from it. Even activities like congestion management, which today are only managed by transmission grid operators and a few power plants, will also be required at the distribution level in the future. This will necessarily involve “non-professional” market actors like private owners of rooftop solar panels.
What is needed to make such a scenario work over the long term is the means to keep the system in balance while allowing a vast number of otherwise independent players to access it. Kreusel made reference to the mobile telecommunication system to make the point that older technologies must still work even as new ones that use the same infrastructure are introduced. The smart grid, then, has to be back-compatible.
This all might sound overwhelming, but many of the technological building blocks are already in place. In fact, much of the change will be focused on things like regulation and business models as opposed to technological hurdles. The one thing that seems certain is that change is coming and market participants as well as politicians need to be open to learning.