The Electrical Grid: Part 2 #30
How will we get the grid to net-zero?
February 10, 2022
It’s Matteo here. Last week we discussed how the electrical grid works. Today, we will learn about the challenges of decarbonizing the grid and some solutions to these challenges!
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This deep dive will discuss how the electricity demand and supply will evolve in the next decades and understand the challenges that the electrical grid will face to adapt to the new situation. In particular, we will focus on what is necessary to reach a net-zero grid.
Forecasts of Electricity Supply and Demand
In 2021 the global electricity demand was approximately 900’000 terawatt-hours (TWh). According to an IEA report, this demand will grow by 4% in 2022. As one might expect, most of this increase in electricity demand comes primarily from China and India.
It is expected that renewables will meet only half of the growth in global electricity demand. If these expectations turn out to be correct, then the electricity sector’s carbon emissions will reach an all-time high of approximately 14 Gt of CO2 in 2022 (estimation based on numbers provided by Breakthrough Energy.)
14 Gt of CO2e is a massive amount of greenhouse gas (GHG) emissions (27% of the global GHG emissions). To reach the net-zero goal, it is crucial to decarbonize the electrical grid. IEA estimates that nearly three-quarters of the global emissions reduction between 2020 and 2025 takes place in the electricity sector.
According to IEA’s recent “Roadmap to Net Zero by 2050”, we can reduce the electricity sector’s emissions in three main ways: :
- Reduce global supply: the supply of electricity has to fall by 7% from 2020 to 2030 and then remain around that level until 2050. This reduction in electricity implies we will need to consume less electricity even if the global population increases. Therefore, we have to diminish the consumption of the devices and machinery powered by electricity.
- More solar & wind: photovoltaic energy and wind power plants have to lead the way and become the primary source of electricity before 2030. By 2050 these two energy sources will have to provide nearly 70% of the global electricity generation.
- Lower non-renewable generation: the portion of electricity that is produced with non-renewable energy sources has to fall massively. Coal demand needs to decline by 90%, oil by 75%, and natural gas by 55% by 2050.
This big shift from fossil-fuel electricity sources to renewables is visualized by the following image.
It looks challenging, but exciting at the same time! ⚡
Energy Transition Challenges
As you might expect, the massive shift discussed above comes with many challenges for the electrical grid. These challenges can be divided into the following three categories:
1. Increasing share of renewables: the shift from fossil fuels to renewable energy resources creates problems for the existing grid infrastructure.
The current infrastructure is designed for consistent, predictable power generation that we get, for example, when burning coal. Wind and solar, on the other hand, are intermittent energy sources, as their production depends on the amount of wind and sunlight. The current grid infrastructure is not well prepared for fluctuating production, which makes balancing the grid (= balancing electricity production and consumption) challenging.
2. Distributed energy resources (DERs): Traditionally the distribution network connects supply and demand (check out last week’s deep dive for more information). However, now more and more people have rooftop solar panels, battery storage, and even small wind farms. These examples are called distributed energy resources (DERs). No longer are huge power plants the only energy generation source on the grid.
Furthermore, most of these DERs are renewables and, consequently, their energy production is intermittent. This means that a large amount of energy may flow into the grid at the same time causing technical problems, such as overvoltages.
3. Novel demand: more people drive an electric vehicle (EV) that needs to be charged and install heat pumps in their homes. These create novel demand for electricity in the distribution network. The added loads increase the electricity consumption’s peaks and stress the whole network.
The figure below compares a traditional electrical grid with a modern and future smart grid through a sketch. In the traditional grid, the electricity flows from centralized generating stations to industry and residential consumers. In the modern grid, electricity is generated both in large generating stations, but also in smaller DERs in the distribution network. Additionally, at all stages of the grid, new high-power consumers, such as EVs, are present.
To ensure that these new resources are properly managed and that the grid’s failures are minimized, a set of innovations both on hardware and software need to happen. We must use new technologies to manage the challenges of the future grid and enable flexible electricity demand.
Let’s dive deeper into these new technologies that can help us to decarbonize the grid. I’ve divided these technologies according to three solution areas: (1) hardware improvements, (2) supply & demand forecasting, and (3) grid control.
(1) Hardware Improvements
The grid of the future has to withstand increased climate stress (extreme heat and cold waves, floods, etc.), larger demand fluctuation, and ensure minimal energy loss.
The existing distribution grids’ hardware must be digitally retrofitted with new smart equipment. For example, embedded smart sensors can send real-time data to the cloud and allow continuous predictive maintenance and minimize grid failures. Other smart sensors will enable grid operators to measure demand and loads at various grid points, enabling advanced grid-control algorithms (see solution area 3 Grid control).
There is room for improvement also in the transmission lines. By improving them, energy loss can be minimized when transmitting electricity over long distances. Advances in high-voltage DC technology and/or superconducting materials provide opportunities to build transmission lines with minimal energy losses.
(2) Supply and Demand Forecasting
As the share of variable energy resources grows (e.g., wind and solar), the importance of forecasting their production to ensure a reliable grid operation rises. Additionally, the rollout of DERs increases the complexity of the demand, which starts to be intermittent too (due to periods of self-production, for example, through solar panels).
These changes require accurate forecasting of supply and demand, which can be achieved through data science and machine learning. These technologies allow grid operators to analyze live and historical data to make energy predictions. An accurate supply and demand forecasting system will increase grid reliability and enable an increased level of renewable penetration.
(3) Grid control
DERs are transforming the grid, as a growing share of electricity is produced by consumers through photovoltaic units and other systems. This causes a bi-directional flow of power. Power flows into the grid during the day, while power is consumed at night. When power flows from consumers to the grid, it can often overflow the grid capacity, resulting in congestion and failures.
Moreover, an increased share of EVs places additional burdens on the system. Many consumers recharge their vehicles at the same time (usually during the night), and electricity demand can spike and overwhelm the system.
These emerging challenges motivate grid operators to manage the networks proactively. There is an opportunity to develop advanced control algorithms that avoid grid overload and failures by dynamically limiting power in and out-flow during peak hours.
However, to do so, additional visibility and grid measurements are required. This is why enhanced digital hardware (see solution area1 Hardware Improvements) needs to be adopted simultaneously.
Startups tackling the grid’s challenges
In the previous section, we have discussed the upcoming grid’s challenges and discovered some technologies needed to solve them. Now we want to focus on who is already tackling these problems by looking at which startups are present in this field.
(1) Hardware Improvements
- CLEMAP develops an IoT edge device and cloud solution to measure and evaluate grid data such as EVs’ charging and households energy requirements.
- Heimdall Power develops a unique sensor package to be installed on the transmission lines that collect data such as power flow, wire temperature, vibration, and others.
- Ionate builds smart hybrid transformers that minimize electricity losses and enable more wind and solar generation to be reliably added.
(2) Supply and Demand Forecasting
- enspired provides energy forecasting to enable its clients to do power trading.
- Think Outside offers accurate information on the quantity of water stored in the snow to hydropower companies, which helps them optimize energy production.
- Hive Power provides a digital solution for smart grid analytics that helps operators forecast the energy demand and other tasks.
(3) Grid control
- Camus provides a grid management platform with advanced control features to handle DERs.
- GridSteer develops grid-aware EV charging stations controllers, enabling the grid operators to control their power requirements.
- Envelio offers an intelligent grid platform that transforms the grid into a digital, flexible, and interactive model.
- Exnaton develops a platform to allow individuals to buy/sell energy with neighbors and grid operators to stabilize the grid through smart demand management.
- Breakthrough Energy (2021). Electricity Policies from the Climate Policy Playbook. Link.
- IEA (2021). Net Zero by 2050: A Roadmap for the Global Energy Sector. Link.
- IEA (2021). Distributed energy resources for net-zero: An asset or a hassle to the electricity grid? Link.
- WEF (2021). Getting to Net Zero: Increasing Clean Electrification by Empowering Demand. Link.
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Have a great weekend,