A smart grid is coming


With a smart grid demonstration project planned for Newcastle, Miguel Brandao explains how smart grids work and what they mean for consumers.

Smart grid is a term that is becoming more and more en vogue in the power industry circle. Not only are utilities attracted to this new concept but governments see smart grids as a way to increase both energy efficiency and energy security, as well as reduce carbon emissions.

The Federal Government recently announced Newcastle as home to the Smart Grid, Smart City demonstration project, with a consortium led by Energy Australia securing the tender. Up to $100 million has been committed to the project which will deploy a live, integrated, smart grid of commercial size and scope in the Newcastle area, with parts of the trial also conducted in Newington, Sydney’s CBD, Ku-ring-gai and Scone.
According to the Federal Government, spreading the demonstration project across urban, suburban and rural areas helps represent the wider grid so that the results can inform future smart grids in Australia.
Smart grids explained
So, what exactly is a smart grid? Definitions and interpretations abound, but it basically means linking telecommunications and IT to the energy world to automate the network in a way that better balances the demand and supply of energy. One can be tempted to compare the coming of Smart Grids to advances in the telecommunications sector in the last 25 years.
A Smart Grid collects real-time data from existing power infrastructure components as well as sensors and meters to better understand what is happening in the electricity grid. From this information energy demand and supply can be adjusted according to criteria such as efficiency, carbon reduction and power quality maximisation.
Real-time processing of this data allows the grid to make faster and better informed decisions. Further, smart grids allow new services such as sending real time consumption information to users and demand response, and enable the seamless integration of renewable energy, electric vehicles and other novel energy resources.
Power co advantages
For electricity utilities, smart grids allow better monitoring and control of all parts of the grid such as increased automation, faster decision-making and actions for restoration of energy supply during an outage, as well as faster isolation of faults and dispatch of repair crews. This in turn will help lower down time for customers.
Another conceptual advantage of smart grids is their ability to match electricity demand to supply and improve the efficiency of energy production, which is important with more renewable energy contributed to the electricity grid, which can sometimes be subject to variable supply. Thus, a smart grid may allow for matching demand to supply using load shifting devices such as energy storage systems and consumer behaviour strategies such as demand response programs and time of use tariffs.
For consumers, more and more is said about consumer empowerment and active participation in the power system. Basic empowerment is giving real time energy usage feedback such as which appliance is using how much and allowing the consumer to make changes in the way energy is used at home. Further, the consumer can respond to grid needs or market conditions. Householders can respond to different hourly power tariffs or demand response programs, where consumers are encouraged by their utility to shift or curtail their loads during high demand times such as hot summer days, and benefit financially for that.
Additionally, the consumer can also become a power producer, such as when they install grid-connected solar panels at home.
Potential problems
There are immediate advantages associated with smart grids, however, the mass adoption of renewable energy and electric vehicles will definitely put pressure on power systems. The electricity grid is still a centralised structure, where large central generators dispatch power to captive and immobile consumers along the distribution grids. Further, transmission and distribution grid devices were not designed for dual power flows, resulting from customer power supply. Therefore, mass adoption of these technologies may have consequences for the grid in terms of power stability and protection, and these risks will need to be managed.
Electric vehicles will also put a lot of pressure on utility systems. If a large number of EVs are allowed to charge at any time, then there’s likely to be higher peak demands and the need to reinforce the grid with more (and expensive) peaking generators and upgrade the transmission/distribution devices for greater peak power flows. However, if recharging is ‘smartened’ then EVs may charge at the time most suitable to the grid. Furthermore, if EVs are touted as an enabler of the decarbonisation of the transportation sector, then their mass adoption will be followed by the mass adoption of renewable energy. If solar and wind are major contributors, then their variable supply requires the grid to react quickly to match supply and demand and maintain grid reliability and stability.
‘Smartening’ the grid can happen in the areas of generation, transmission, distribution and on the consumer side. Utilities already have energy management systems in place to manage generation and transmission, so the distribution and consumer side will be given the most attention in order to reach a fully ‘smart’ power system.
Large investment in the deployment of new sensors, new communications and IT platforms to facilitate the flow of information, and new control and management platforms to process the gathered data and take necessary management decisions will be needed to smarten the grid. These renovations will enable further interaction between utilities and their customers, including the deployment of new services such as demand response. However, this investment will need to be significant.
There are other complicating factors. Vertically integrated utilities can make the investments and collect the benefits. But in very fractioned markets (where retailers, transmission and distribution companies, generating companies work individually), accruing the costs and benefits of smart grid investments across stakeholders will be challenging.
Further, some benefits such as carbon reduction are difficult to capture without adequate regulatory measures. Current regulatory regimes in general are not designed to get the most energy efficiency, despite market competition (where it exists) or include an increasing number of consumers/producers. Yet, in a resource constrained world, and where carbon is important and consumers are looking for lower power costs and more energy security, regulators and utilities will have to work together, with consumers, to design innovative power regulations that enable these goals.
As well as the smart grid trial in Newcastle, the United States has committed $3.4 billion for Smart Grid trials, and Europe, China, Korea and Japan are also have similar projects. Thus, smart grids are becoming a reality. Let’s trial smart grids so that the technology is tested, consumers participate and the cost benefits of different business models are assessed.

Miguel Brandao is Smart Grid Technical Solution Leader for SE Asia at GE Energy, Singapore. Miguel also worked with ATA in 2007 on a rooftop solar PV systems survey.
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