Smart grids: where social and digital innovation meet

The 20th episode of the Better Cities - The contribution of digital technology-series is about electrification, as part of climate adaptation. Based on this theme, both the role of digital technology and the relationship between digital and social innovation will be illustrated.

The Dutch government has dug deep into its pockets to get citizens and companies to cover their roofs with solar panels and to encourage the construction of solar meadows. Favorable tax facilities have been created and a generous so-called ‘salderingsregeling’ has been set up, and with success.

Solar energy and grid overload

Most citizens are very satisfied with solar panels and their impact on the energy bill. So far, no audit office has checked what the government pays for a kilowatt hour of electricity that citizens produce on their roofs. This includes the costs of the aforementioned (tax) facilities and subsidies, as well as the billions in investments in grid reinforcement resulting from the large-scale (re)delivery to the grid of decentral generated energy. In fact, when there is more supply than demand for electricity on the grid, the wholesale price of electricity is negative. In that case, thanks to the ‘salderingsregeling’, the electricity company pays back the full amount and also has to pay(!) companies that buy electricity at that time!

And now? Now the government suffers the consequences and is limiting the growth in the number of solar panels. Many requests for the large-scale generation of solar energy are waiting for a license because the electricity grid in large parts of the Netherlands is overloaded.

There are three ways to solve this problem. The first is to increase the capacity of the high-voltage grid. The second is large-scale storage of electricity, both for the short and the long term. The third is network management. The least elegant solution here is curtailment which means that the capacity of all solar meadows and wind farms is only used for 70%. A better alternative is the construction of smart grids; this is what this article is about. Smart grids have more to do with digitization than with extra cables. *A smart grid is an energy system in which PV panels, electric cars, heat pumps, household appliances, large but also small-scale storage systems and substations are intelligently connected.*However, more attention to energy storage is desperately needed too and high-voltage grid reinforcement will also be inevitable locally.

From centralized to decentralized electricity supply

Electricity infrastructure around the world is designed for centralized electricity generation, characterized by one-way traffic from producer to consumer. Now that many consumers have also become producers ('prosumers') and solar meadows and wind farms are being developed in many places in addition to the usual power plants, the network structure of the future must be decentralized. It will consist of two or three levels. Together, these will ensure a stable system in which much more electricity is used than today. This new structure is at the forefront of development. In 2016, approximately $47 billion was spent worldwide on infrastructure and software to make the electricity system more flexible, integrate renewable energy and better serve customers. The book Promoting Digital Innovations to Advance Clean Energy System (2018) is an excellent overview of these developments. This book can here be downloaded for free.

Most prosumers supply an average of 65% of the generated electricity back to the main grid. Own storage capacity is part of the solution and creates a mini grid that significantly reduces the need to supply back. Otherwise, there are times when the main grid benefits from supplying back locally generated power. Therefore, the next step is for main and mini grids to communicate with each other. In this case we speak of a smart grid: The management of energy production in large-scale power stations (including wind and solar parks) will then take place in conjunction with the regulation of the inflow and outflow of electricity from the main grid to the mini grids. This may also include signals to households to charge or discharge batteries, turn on the boiler, postpone charging the car or stop the production of energy. An automated monitoring and control system is a necessary enabler here.

The exchange of data between mini grids and the main grid has many privacy aspects, especially if the grid operator can influence what goes on 'behind the meter'. An intermediate layer between main and mini grids offers a solution. We then speak of a microgrid. This is a kind of switch between the main grid and the micro grid, that enables the micro grid even to function autonomously in the event of a failure of the main grid.

A microgrid contains three elements:

1. Installation(s) for local energy production for more than one user (usually a neighborhood): solar panels, wind turbines, cogeneration, heat pump(s), biomass power station, hydropower turbine and possibly an emergency production system (generator).

2. A storage system: home and neighborhood batteries and in the future also supercapacitors and chemical latent heat storage.

3. A digital management system to guarantee the balance between the production of and the demand for electricity, to determine how much energy is taken from or returned to the main grid and which calculates the costs and benefits per household.

The micro-grid

In a micro grid, households can exchange their surpluses and shortages of electricity without the direct intervention of the grid operator or the electricity producers. These are solely related to the surpluses and deficits of the entire microgrid, eliminating the need to interfere in the mini grids of individual households. Thanks to the real-time monitoring of electricity production and consumption, the price of electricity can be determined minute by minute. For example, the households that are part of the microgrid can agree to purchase as much electricity as possible when the price is low. At such moments, home batteries, electric cars, any neighborhood battery and boilers and hot water barrels will be charged and heated. This can be done fully automated. For example, the Powermatcher, an open-source application developed by TNO, which now employs 1000 people in the Netherlands. This video illustrates how a microgrid works.

A microgrid gains extra value if the users form an energy cooperative. Here it is possible to decide about the algorithms that regulate the circulation of the current in the microgrid. A cooperative can also take care of the management and maintenance of the solar panels of other collective facilities such as a neighborhood battery, local energy sources (wind or solar park or geothermal heat). The cooperative is also a good means of negotiating with the network operator and the energy company.

The virtual power plant

By linking heat pump technology, energy generation and energy storage at the district level, a significant step can be made with the energy transition. Here are some examples.

The Amsterdam virtual power plant
An almost classic example of a microgrid is the Amsterdam virtual power plant. Here, 50 households produce electricity with solar panels, store it in-house and trade it according to availability when the price on the energy market is most favorable.

Future Living Berlin
This is a nice small-scale practical example developed by Panasonic. Future Living Berlin consists of a neighborhood with apartment buildings for a total of 90 households. The residential buildings are equipped with 600 solar panels that, together with a collective battery system, provide a constant flow of sustainable energy. Among others, to power the seventeen central air/water heat pumps, of which two to five per residential building are installed in a cascade and provide heating and hot tap water. The shared cars and communal washing machines are good for the environment, and they also promote neighborly contact. The Internet of Things also plays a role in controlling the heat pumps. Installers maintain remote access to these systems via a cloud platform.

Tesla's Virtual Power Plant
Tesla has built a virtual power plant in Australia for 50,000 households. Every household has solar panels, with a capacity of 5 kilowatts and a Tesla Powerwall battery of 13.5 kilowatt-hours. As a result, the power station has a capacity of 250 megawatts and a storage capacity of 675 megawatt-hours. Here too, every household charges the battery and possibly the car with self-generated energy and with cheap energy if the supply is large, and they supply the energy they have left to the electricity companies at the market price. In this way the participants save 20% of the annual energy costs.

The ultimate step: autarky
Companies that want to use solar panels and supply the surplus of energy back to the grid are also increasingly encountering the capacity limitations of the main grid. The result is that an increasing number of businesses take power supply into their own hands and even completely refraining from being connected to the grid. Commercial solutions for local virtual power grids are now available, for which companies such as Alfen and Joulz are involved. One of the options is Energy-as-a-service, where the business customer does not invest in an installation but pay a fixed amount per month.

The use of blockchain

Blockchain enables exchanging surplus energy between prosumers without human intervention. Brooklyn Microgrid is a 'benefit corporation', to which every resident who has solar panels can connect and buy energy directly from or sell energy to another user (P2P), without the intervention of the electricity company. Blockchain provides a secure, transparent, and decentralized ledger of all energy production and consumption data and transactions based on 'smart contracts'. These are self-executing programs that automate the exchange of value (here, the amount of electricity) on bilaterally agreed terms. Home and neighborhood batteries, individual and collective heat pumps and charging stations for cars can also be connected to this system.

A similar pilot with blockchain is taking place in the southern German town of Wilpoldsried. Project partners Siemens, grid operator AllgäuNetz, Kempten University of Applied Sciences and the Fraunhofer Institute for Applied Information Technology (FIT) have jointly developed the platform and an app, considering the given load capacity of the grid.

Digital twins: need for oversight

Smart grids, ranging from local mini and micro grids to regional applications, are a substantial alternative to grid reinforcement. At the same time, they create new electricity flows, especially where there is a direct exchange between smart grids and the main grid. That is why there is a growing need to map these flows and regulate them where necessary. Digital twins can be helpful here.

Delft University of Technology has developed a small digital twin for a quarter of the Dutch high-voltage grid. This will gradually be expanded to encompass the entire network. To this end, the existing high-voltage hall of TU Delft will be converted into an Electrical Sustainable Power Lab, which will mirror the electricity network, including high-voltage pylons, sources of wind and solar energy, energy storage and distribution networks. This allows, for example, to simulate the effect of linking a new wind farm. As a result, it provides an overview of all bottlenecks and thus lays the foundation for better network management or the choice for grid reinforcement.

But there are also many promising developments at the local level. For that we must be in the US for the time being. The Cityzenith company, together with Arizona State University, has developed the SmartWorldOS digital twin and is making it available to Phoenix, Las Vegas and New York. Each of these cities is building a digital twin of a part of the center. The twins comprise all the buildings, transportation systems and infrastructure of the affected areas and are powered by sensors sent over a 5G network. They aggregate 3D (space) and 4D (time) data about the actual energy use and visualize and analyze it. Subsequently, the impact of other forms of lighting, heating, but also electricity generation with solar panels on the roof, on the facades and in the windows can be simulated and measured and a decision can be made about their implementation.

I have compiled a dossier on many aspects of the use of solar energy. This dossier deepens this article in several respects. Innovations in solar panels, the use of window glass to generate energy, the growth of solar energy in the Netherlands and the storage of electricity are discussed. Those who are interested can find this file by following the link below.