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Why smart power grids are now essential

First it was the pandemic, now it’s war. When it comes to factors affecting energy demand and supply, there’s no doubt we are living through uncertain times.

The unpredictable nature of world events is putting enormous pressure on our energy networks. According to a recent report by the International Energy Agency (IEA), last year saw a surge in global electricity demand and prices, and that data was published just over a month before Russia invaded Ukraine.

Now, the US, UK and EU have announced they’re going to restrict Russian oil and gas imports, a decision which is only going to create further pricing volatility and increase the demand for renewables worldwide.

The IEA found that last year’s rise in demand for electricity of 6%, the largest in percentage terms since 2010, resulted in an increase in carbon dioxide emissions of 7%, a record high. The previous year saw a reduction in CO2 emissions, largely due to a drop in demand for electricity because of the Covid 19 pandemic. National Grid ESO spent £718 million in payments to balance the UK’s network, including paying energy companies to produce less electricity.

In the past, power networks were structured like a tree, with electricity generated at centralised power stations, then fed their power out through a transmission network or ‘trunk’. That transmission network then fed into regional or local distribution networks, like the branches of a tree, which brought the electricity to the homes and businesses that needed it.

Renewable energy has turned that model on its head. Many of the sources of renewable energy are in areas at or towards the very edges of the power network. That’s already requiring upgrades to the transmission and distribution systems, with infrastructure funds and institutional investors playing a role in bringing offshore wind power to the masses.

Yet this decentralisation of power generation also creates opportunities for smaller players and those with an eye to replicable smaller project investments too. Instead of being solely reliant on electricity coming from central power stations, end users and local players have the chance to generate and store their own power, whether it’s through roof-mounted solar panels, small-scale wind turbines, anaerobic digesters, or a host of other renewable and new energy devices.

This is where smart grids come into play. Given the intermittent nature of renewables, balancing supply and demand will become even more critical and balancing is required throughout the tree structure of the electricity system.

Smart grids allow reserve sources of power – such as grid-scale batteries and EV batteries – to be accessed within a few milliseconds, helping to balance supply and demand. On the other side of the equation, smart grids are needed to dial-up demand at times of surplus production; if it’s a windy night and electricity is available from turbines then prices or control signals can be sent to heavy industrial users to start their machinery to harness the power, EVs can be told to begin charging, even ‘smart’ washing machines can be told to start spinning those delicates.

For more information, please contact us.


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