The operative system for a decarbonised, decentralised, digitised energy system.
Increase of electrical energy demand
According to the IAEA, the world’s electrical energy demand is expected to double by 2050, with an average increase above 2% per year. [1]
The increased demand is driven by significant factors such an expected growth in global population, the ever-growing number of new electrical appliances, the transition of the transportation system to electrical vehicles, and the increasing electrification of systems like heating.
Furthermore, there is global commitment to provide electricity to areas of the world that don’t have a reliable supply today, counting for almost 1.2 Billion (18%) of the global population [2].
With a forecasted increase of production of 1% year on year, the need for a more efficient energy system is becoming priority to sustain the faster growing demand.
The need for decarbonization of the energy sector
Co2 emissions from electricity generation account for 45% of world energy-related emissions. Carbon emissions from electricity generation depend on both the quantity of electricity produced and the types of sources used. [3].
Reducing the amount of CO2 emitted, achieving the goals of The Paris Agreement set for 2050, will require a change to the energy mix used to produce electricity, in favour of ‘cleaner’ sources. [4]
Furthermore, in isolated areas, the primary choice of source for electricity are fossil fuels, currently economically advantageous compared to greener solutions. This poses an environmental risk, considering that the majority of the global population without access to energy are either in isolated areas, or in developing countries below poverty threshold. [5]
Why Microgrids: the transition to 100% renewable energy
Our incumbent energy system is highly inefficient. Fossil fuels are hard to transport and their highly centralized system relies on volatile and often inefficient supply chains. 33 percent of the inefficiency is due to fossil-based electricity production, with 41 percent of energy wasted in outdated fossil-based heating technologies and modes of transport. Electricity, however, offers a significantly more efficient system. In fact, electricity powered by renewable sources is virtually 100 percent efficient at end use and can be produced and managed locally and flexibly. Renewable energy is now the cheapest new electricity in countries that make up three quarters of the world’s GDP [6].
For businesses and consumers, renewable energies are today’s fast track to meeting decarbonization commitments and securing public support. Corporate demand for renewable energy is currently greater than current supply by 27 terawatt hours, and this gap is predicted to increase tenfold in the next 10 years [7] . Private businesses and residential will be key in building a more resilient energy system by unlocking demand flexibility to strengthen fragile grids by managing more distributed energy resources, such as energy from rooftop solar panels, batteries, and electrical vehicles, as well as heating or cooling loads through energy retailers.
Challenges of integrating renewable at scale
Intermittent renewable energy sources, also referred to as variable renewables, are energy sources that are non-dispatchable due to their fluctuating nature. Wind, Solar and Tidal energy are considered intermittent renewables as opposed to controllable renewable energy sources such as hydroelectricity or biomass.
The variable nature of wind and solar poses problems for balancing supply and demand on different timescales (from seconds to seasons) and on different spatial scales. The distributed nature of these energy resources also adds complexity in terms of connecting them to the existing grid infrastructure. We need to amend and redesign not only the way in which we deliver electricity, but also the electricity market, which is designed for fossil fuel generators. Associated with this redesign is the need for new regulation and governance models and procedures.
Microgrids benefits
For years, large centralised systems have dominated energy generation, transmission, and distribution. Microgrids, in contrast, represent a small network of electricity users with a local source of supply.
Microgrids are usually attached to a centralized national grid (grid-tied microgrid) but are able to function independently. When a Microgrid is isolated from any other electricity network, is commonly referred to as an islanded microgrid.
Microgrids contribute to the energy transition to renewables by providing practical and accessible answers to improve energy reliability, resiliency, accessibility and cost optimization.
When the main grid encounters disruption or instability, a microgrid operation is decoupled and continues to deliver energy from local sources.
Reduction in distribution distances, due to a geographically closeness of demand-supply, allow for a reduction in infrastructure costs, as well as reduction of conversion energy losses.
Finally microgrids, allow for more sophisticated and localized operational controls, including precise forecasting, more tailored infrastructure investments, and more advanced demand-side management and control.
Digitalizing the future
In order to operate Microgrids, an energy management system is required.
This can be as simple as the software that today comes with inverters and electric vehicle chargers, where basic operation of metering and grid synchronization are taken care of.
I believe that the energy management system for microgrids needs to be simple, yet smarts. Non intrusive, yet fully integrated.
It learns customer needs, system topology and the status of every component of the grid in real or near-real time to enable autonomous optimisation with the aim of maximising reliability, availability, efficiency and economic performance of the system. Thanks to advanced data processing and machine learning algorithms implemented, it relies as little as possible on operators, particularly in responding rapidly to changing conditions.
It needs to work both on grid-tight configuration, as well as islanded one.
Towards a total integration
One of the main goals of the operative system is to reduce the complexity and the fragmentation of management of today’s grid.
It takes care of interfacing with all the components of the grid. This, in the current state of the ecosystem, it’s only possible by consolidating the different protocols and standards present in the market into a unified message based communication protocol.
It needs to supports, out of the box, cloud connected or wifi enabled (wireless lan connected) devices.
When the physical layer of devices in the home don’t offer Wireless connectivity, hardware communication modules needs to be adopted to bridge the existing connectivity.
Those modules are basic hardware connectors with the capability of translating a physical connection (ie: RS232, CAN, ETH) to a compatible one (WiFi).
Operability and optimization
In order to accelerate the transition to microgrids, it’s critical that the software operating them is easy to use, offers exceptional operability ergonomics, and can adapt to the vast and diverse list of use cases.
At the core of it there are systems that are using internal data (delemetry of the grid) and external information (weather, price, local energy grid status), to optimize energy flow and support demand side response.
It can optimize energy flow to best support demand, including negotiating energy exchange with the grid, with peer nodes (other households) and implementing storage strategies.
We do this by adopting adaptive and active learning algorithms that learn over time households needs.
By offering automatic control, it can optimize further your system, by regulating energy demand of single devices. This includes automatically controlling amperage of EV chargers, shift-in-time demand of appliances like heat pumps, and energy flow of storage systems (batteries, water storage, vehicle-to-home interfaces, etc).
Furthermore, for all those use cases, where the user is not comfortable with silent automatic decisions, it offers an easy to interact interface, that prompts the users with opportunities for additional cost savings and offers full control over their systems.
Open and extendible
One of the biggest friction points on transition to microgrids are the over fragmentation of the market, leading to overproliferation of non-interoperable standards, and on the opposite side of the spectrum, the verticalization, by industry leaders, forcing the end user into branded lock-ins, reducing resiliency and interoperability.
Integration and data layers are fully open sourced. This allows system integrators and component manufacturers to easily adopt it as their orchestration solution, for free. I envision future appliances to use the energy information to offer energy effective dynamic features (ie.: eco-friendly dishwasher program that fit consumption spikes into the overall household consumption, dynamic cooling ahead of a potential grid brownout, EV chargers that can offer dramatic reduction in price per charge based on smart energy arbitrage).
3rd parties can benefit from an infrastructure operational at global scale, industry standard protocols, and the network effect of the existing appliances part of the ecosystem.
We should also invite anyone to build their own application, including alternative energy management systems on top of our platform. If better automation and optimization can be developed, and our mission be accelerated, it’s ultimately in the best interest of humanity, and we want to support that.
Conclusions
Past energy transitions moved slowly because they relied on sweeping infrastructure changes from centralized sources. By contrast, the renewable-energy transition is driven by small, decentralized generation and storage on buildings and homes, all connected by software.
For companies, investors and homeowners, now is the time to invest in renewable energy. Policymakers can accelerate the adoption, both to fight climate change and provide economic expansion in a growing sector, while ensuring an equitable transition for communities.
We need an operative system for decentralized, decarbonized, digital smart microgrids, and we need it now.
Notes & References
1 https://www-pub.iaea.org/MTCD/Publications/PDF/RDS-1-40_web.pdf
2 https://www.iea.org/reports/sdg7-data-and-projections/access-to-electricity
4 https://ec.europa.eu/clima/policies/international/negotiations/paris_en