The Smart Grid Era:
Even Electricity Grids Now Smarter
Aug, 2021

Climate change is becoming increasingly serious all over the world. In Germany and China, unprecedented flooding has occurred, while parts of the U.S., Japan and Korea are experiencing scorching heat. Such heat waves not only brings hot and humid weather, but also lead to increased electricity consumption via increased reliance on cooling systems. In Korea, for the first time since 2013, electricity demand has soared beyond forecasts, causing issues in management of electricity supply significant enough to consider issuing an emergency alert on the electricity supply-demand situation. 

As a product, 'electricity' has one distinctive feature. Once you produce it, you need to consume it right away. As there are markets for it, just like for any other product, there is supply and demand, but you cannot keep it in inventory. This is the reason why the role of the grid in coordinating immediate transactions between power suppliers (power plants) and consumers (businesses or ordinary citizens) is vital.  

Recently, use of renewable energy based on various energy sources has been expanding in response to climate change. Because renewable energy is produced depending on natural conditions, certain degrees of variability come pre-baked in. In recent years, we've seen natural disasters occur more frequently, ranging from heat waves and droughts to floods, leading to increased volatility and uncertainty of the electrical grid more than ever before. While in the past, power supply was centralized, renewable energy is distributed based on each region, making the process of overall power supply a bit more complicated. In other words, it's hard to predict when and where there will be higher power consumption. And that's where Smart Grid technology comes in. It allows management of power demand and supply in smarter and more sophisticated way.

As a response to the climate crisis, it seems that the role of smart grids will be much more significant in the future. In a forum last July, senior European Union political secretary to South Korea, John Bogaerts said, “The EU is working to achieve the goal of carbon neutrality by 2050,” adding, “Smart grids will play an important role in achieving carbon neutrality.” 

The “Grid,” a solution to relieve the imbalance of power supply and demand.

<Smart Grid Concept Diagram, Korea Smart Grid Organization>

The smart grid, known as a next-generation power grid, optimizes energy use by utilizing information and communication technology (ICT) in the existing grid by combining renewable energy (solar, wind power, etc.) and energy storage devices. In other words, a supplier previously sent power to the consumer unilaterally; now, smart grids are able to use energy more efficiently by interacting with suppliers and consumers directly through an IT network. These technologies are applied across all fields of power systems, from power generation to power transmission and distribution. ICT-based wide area monitoring and control technology makes it possible to monitor and control a wide range of areas by efficiently managing the power grid in real-time.

<Comparing existing power grids and smart grids, Source: IEEE (Institute of Electrical and Electronics Engineers)>

However, unlike the traditional grid, the distributed grid makes it difficult to identify overall power demand immediately. This is why the VPP, Virtual Power Plant, will become an important asset, as it connects and controls multiple distributed sources of energy using ICT and automatic control technology, operating like a single power plant. As a matter of fact, we are seeing an active surge of its implementation in countries around the world. 

In addition to analysis and control technologies, another key technology in the smart grid system is power storage technology – which includes Energy Storage Systems (ESS) and Smart Metering Infrastructure (AMI). ESS in layman's terms is a large capacity battery. ESS is a system that stores hundreds of kWh or more of power, different from a small power storage device like small batteries. Electricity that was previously produced but not used was inevitably discarded, but the ESS can save that power. This allows us to compensate for the shortcomings of the product, electricity, which has been difficult to store.

<The data collected by smart electric meters is sent via Wi-Fi and other communication networks. Source: Korea Energy Corporation Imaginary Energy Workshop>

Smart electric meters compensate for the shortcomings of electricity demand and are able to analyze consumers’ power consumption patterns accurately. The purpose is to determine the total power usage per household and deliver advanced data about demand.

Status of Smart Grids by country

<COVID-19 Impact on Smart Grid Market (Pre Vs. Post COVID-19 Analysis), Source: MarketsandMarkets>

The growth of the smart grid market, which had continued for a long period of time, is now faltering due to COVID-19. A series of cancellations of smart grid-related exhibitions and events affected by non-contact trends, including social distancing, and COVID-19 lockdowns have had a direct impact on the production schedule of smart grid hardware manufacturers. However, as smart grids again draw interest amid intensifying climate change and surging electricity demand, the market is expected to gain momentum again next year. According to market analysis firm MarketsandMarkets, the market will grow to USD28.8 billion from USD26.9 billion in 2020. 

Studies on smart grids have been led by the U.S. The U.S. government announced ‘Grid 2030,’ a national vision for upgrading the electricity grid, starting in 2003. In addition, the U.S. Department of Energy reviewed the feasibility, benefits and business models of the smart grid through the Smart Grid Demonstration program for the first time in the world. IT companies, including Google, IBM and Intel, also joined the smart grid business. 

Google is already operating microgrids between its headquarters and data centers, and Apple has established an inhouse *microgrid system to enable seamless delivery of services even when the existing grid is disrupted.

*Microgrid: Microgrid is an electricity network tailored to the characteristics of small areas. It supplies electricity through small, independent distributed power generation.

In addition, IBM and Intel are offering smart grid platform services taking into account security, communication, analysis and manageability. Of particular note, IBM formed a blockchain consortium jointly with three electricity service providers and pilot-operated Equigy, a decentralized-type, electricity demand control platform.

The Japanese government in 2011 launched four smart grid demonstration projects with investment of 18.2 billion Japanese Yen, achieving visible results and recording a 10-20% reduction in peak electricity load.  

In Denmark, the Parliament has led the development of windmill technology since 1980, and the country is pursuing the establishment of a 100% energy independent city for the first time in the world. For a wind farm to supply electricity stably, a smart grid is essential, as wind turbines’ unstable power generation must be supplemented by controlling energy efficiency and electricity rates. The Danish government expects that linking wind farms to electricity grid will reduce energy consumption by 25%.

The Korean government will also invest KRW27.5 trillion in smart grid infrastructure, expecting to cut 230 million tons of greenhouse gas emissions and KRW47 trillion in energy imports. Specifically, the Ministry of Trade, Industry and Energy, with the announcement of the second fundamental smart grid strategy, plans to invest KRW4.5 trillion in the smart grid industry and install smart AMI (Advanced Metering Infrastructure) at 22.5 million households across the country to expand the smart grid system.

Q CELLS is moving to keep up with the latest trends

As the energy industry sells a special product, energy, its offering should not be limited to providing energy, but also deliver comprehensive and multifaceted services. In line with the trend, Q CELLS is working to drive diverse transformations. 

Q CELLS recently acquired US-based energy software company GELI, which offers an energy management system (EMS) to manage PV generation facilities and ESS based on data analysis technology. With the acquisition, Q CELLS will be providing PV electricity package service, including energy management, to extend its business beyond PV delivery. 

In addition, by investing AUD5 million in SwitchDin, an Australian microgrid and network service provider, the company plans to deliver a total energy service, aggregating and managing energy.

There are some forecasts predicting that the smart grid industry market will grow to KRW ten quadrillion by 2030. The key to the grid is to maximize energy efficiency by generating as much electricity as required and storing and supplying the extra electricity. It is a system that can reduce unnecessary supply through the smart forecasting of power demand. In addition to simply supplying energy, we have to prepare a smarter and more efficient power industry.

#Energy Story
#Smart Grid
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