Feature

Renewables in smart grids: Part II


CRISTINA BROOKS

In the first installment of this feature, REFocus contributor Cristina Brooks discussed the basics of smart metering in relation to energy storage. Part II delves into greater detail, comparing grid and energy storage issues and metering concepts in California, Sweden and Canada.

Like Nordic states, the US state of California implemented an ambitious plan to encourage more renewable power usage. The state’s Renewables Portfolio Standard requires utilities to procure 33 per cent renewable generation by 2020, up from an average of 22.7 per cent procured in 2013.

The state water regulator’s move to protect the marine environment from turbine cooling effluent has led to decommissioning of a nuclear plant, sending utilities in search of alternative solutions that can provide flexibility and 4-6 hours of energy to help meet summer peak demand. 

American grid-scale battery manufacturer, Eos Energy Storage, is launching a new battery product that could be deployed to address these needs in smart-grid enabled markets such as California and New York.

“Smart meters have, for the most part, already been deployed in California,” said Philippe Bouchard, vice president of business development at Eos Energy Storage. “This represents the first wave of intelligent communication and control. We’re just now seeing the enabling effects on distributed resources such as solar PV and storage.”

Eos Energy Storage’s battery would be used in schemes that allow the utility to contract renewable energy for peak reduction — meaning batteries combined with solar or wind could be aggregated and dispatched as virtual power plants that obviate the need for new gas turbines.

Bouchard explains why California is a good market for battery storage. “Once again, California is leading the way in market transformation with landmark legislation that will require utilities to procure 1,325 megawatts of grid-connected energy storage. We’ve officially moved beyond the era of demonstration projects and are entering the realm of commercial deployment.”

Third-party solar developers and energy service providers, such as California-headquartered solar power installer SolarCity, are making aggressive moves into energy storage and are now offering battery-integrated solar arrays.

“With a battery-connected solar PV system, customers can island themselves from the grid to maintain reliability in the event of an outage while providing value-added services to the utility when the grid is up and running,” Bouchard explained. “Smart grid technologies provide the information platform required for optimization of distributed resources in real-time. This opens up new revenue streams that will ultimately make batteries and renewable energy more affordable for consumers.”     

Sweden innovates
 
Sweden’s climate policy lays out a target of 40 per cent for emissions reductions and 50 per cent for renewable power’s generation share. Almost all of Sweden’s electricity is generated from nuclear and hydropower, with wind and solar gaining a small fraction. (With temperatures falling below freezing in winter, peak demand in Sweden mainly comes from heating.)
 
Utilities in Sweden use the real-time market to charge consumers on TOU pricing, fixed pricing and dynamic pricing, with different plans available in different parts of the country. There are currently no peak demand reduction contracts available to distributed renewable generators.

The Swedish Coordination Council for Smart Grid, a government-appointed body, is coordinating smart grid research and will submit a national action plan for optimization of smart grids in December of this year.
 
Susanne Olausson is smart grids program manager for Swedish consultancy Elforsk, which researched and developed transmission for powerline-type smart meters that were rolled out for the entire country before 2009. “We talked about having a rule for small-scale production,” she explained. “People buy solar panels and install them on their homes. They want to sell energy on the same tariff as they buy it, but the government hasn’t decided on it yet because there is resistance from the power companies.”
 
According to Olausson, power companies have a problem in that they don’t want to buy much electricity during the summertime because nobody uses it. Rather, they want electricity in the winter time, when people demand the energy. “We have more wind now, but that has nothing to do with smart meters,” she explained. “Now the discussion is over whether — when the wind is blowing a lot — the hydropower has to be reduced.”  

Questions like these may be on the table for the years to come. “The market is not mature yet,” Olausson stated. “You could force more renewables generation, but then I think the Swedish economy would go bankrupt. It is the responsibly of our politicians to keep energy cheap so we can afford schools and such.”
One impact smart meters has had is convincing consumers to use power when the wind is blowing — although choosing to shut off the heat in response to pricing at other times represents a painful change of lifestyle.
 
Since 2012 a trial has been taking place on the Swedish island of Gotland, targeting increasing wind capacity above 38 per cent with high day/cheap night tariffs. It is now testing model-based solutions to transmission constraints that can use smart grid data.
 
Coal-free Ontario
 
The Canadian province of Ontario’s smart meter roll-out began in 2006. With the government’s environmentally motivated decision to phase out coal power by taking four coal plants offline, the province ramped up generation from renewable sources under a popular MicroFiT scheme and plans to contract 50 megawatts of energy storage this year.

Ontario’s Power Authority (OPA) as of December contracted 37 per cent renewable generation from combined bio-energy, solar and wind power; it plans to increase wind power 8 per cent by 2025. Around 50 per cent of capacity comes from nuclear generation from state-owned company Ontario Power Generation (OPG), with hydropower taking a large share.

Ontario’s non-profit wholesale market operator, Independent Electricity System Operator (IESO), led the smart meter rollout with the implementation advantage of state-owned generation through OPG and distribution networks through Hydro One.

Thanks to smart meters, commercial consumers can now get bill reductions if they agree to reduce their energy use during peak time s— when there is increased demand from air conditioners. However, renewable generators are not currently offered peak demand reduction contracts for generation.

The government of Ontario in January surprised the industry by shrinking MicroFiT capacity targets, scaling back on future contracts, possibly due to limited taxpayer support. As OPA moves to a ‘more competitive procurement model’ in awarding contracts to renewable generators, bigger renewable energy generators with more capital could have a competitive edge on new projects in the province, observers say.

Installers of small-scale MicroFiT generation think there may be a link to decreased MicroFiT availability and smart meters.
 
“If everyone in every industry had their own power system, they wouldn’t be paying for power at all,” said David Cooke, founder of consultancy Cooke and Associates, as well as solar and wind power installer, True North Power. “That is a problem for government, because if you can’t control the meter, you can’t bill it — and you can’t collect any taxes.”
 
Cooke says the utilities have been putting up “roadblocks” in every way possible. This includes financial disincentives. “I had to spend $1,500 on engineering, $500-600 on equipment and maybe $500 on labor and time just to put in the required smart meter monitoring — and approve the installation of a 4 kilowatt-hour array on my roof,” he explained. “In Germany, that would have cost far less to approve and taken only a few days with an on-line application and approval process.”

On this issue, Cooke has a theory: I think they’re afraid of losing control of the monopoly they’ve had with no competition,” he said. “It’s no more energy than a hot tub, but they made a big deal about it because you’re producing power they can’t control.”  
 
Greener someday
 
A higher tech grid will not necessarily remove the need for grid reinforcement costs for transformers or connection fees currently applied to new renewable generation. For example, these fees are still required in the Swedish smart grid market.

High voltage, direct current (HVDC) transmission — while not necessarily part of smart grids — might also still be required to reach the highest renewable generation targets.

It remains to be seen, in many cases, whether a smarter grid is necessarily a greener grid — and whether peak demand reduction contracts (largely unused so far) will open a gap in the market for distributed renewable suppliers to fill.
 
Because of this, increasing renewable targets may be a reductive justification for smart meters’ frequently higher pricing schemes, but it goes to show renewable players have significant leverage over public opinion that is crucial for utilities dealing with the sensitive issue of rolling out higher prices. They can use this to their advantage when negotiating with regulators and utilities to secure a market share in smart grids.  
 
ABOUT THE AUTHOR
Cristina Brooks has written extensively on energy and construction. She contributes regularly for the Gas to Power Journal, LNG Journal and Climate Action. Brooks has also written for Cranes Today Magazine, and she produces the blog: Electricity Bill Watch.

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Energy efficiency  •  Energy infrastructure  •  Photovoltaics (PV)  •  Policy, investment and markets  •  Solar electricity  •  Solar heating and cooling  •  Wind power

 

Comments

ANUMAKONDA JAGADEESH said

11 September 2014
Excellent.
Wind and solar power are inherently variable, meaning sometimes the wind doesn't blow and the sun doesn't shine. Then what? Fortunately, smart grid technologies can help manage the unpredictability of wind and solar to help alleviate reliability and stability issues caused by power fluctuations. This will become increasingly important as more wind and solar power is connected to the grid. Automated demand response technologies will act as a lever that utilities can pull to help lower demand in the event there is a gap in renewable power generation—for instance, if the wind stops blowing. To address such contingencies, a utility may incent consumers to opt into programs that allow certain devices (i.e., water heaters) to be temporarily switched off during peak times. In the future, storage technologies could also help utilities manage the short-term imbalances in the supply and demand of energy, sometimes caused by the fluctuations of a lot of renewable energy. Batteries will store energy during times of excess wind energy production and discharge that energy via smart grid automation technologies when energy demand exceeds supply. While building new infrastructure would certainly help, smart grid technologies can also help utilities alleviate grid congestion and maximize the potential of our current infrastructure. Smart grid technologies can help provide real-time readings of the power line, enabling utilities to maximize flow through those lines and help alleviate congestion.As smart grid technologies become more widespread, the electrical grid will be made more efficient, helping reduce issues of congestion. Sensors and controls will help intelligently reroute power to other lines when necessary, accommodating energy from renewable sources, so that power can be transported greater distances, exactly where it's needed.
Dr.A.Jagadeesh Nellore(AP),India

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