The bridge to smart grids?

February 4th, 2013, Published in Articles: Energize

by Mike Rycroft, editor

It is traditional for the first issue of a new year to take a look at what the year ahead holds. Crystal gazing gives a murky picture, but one thing is certain: with no prospect of any substantial amount of new generation capacity coming on stream until late in 2013, or even worse, early in 2014, the electricity supply situation is going to remain tight for most of the year.

The previous year has seen a flood of comments on the causes of the supply problem, but there seems to be agreement on the main cause being lack of adequate planning. The supply/demand gap was identified long ago, and apparently policy was put into place to cater for new generation, but nothing further happened, leaving us to play catch-up on almost a decade of no new build. If poor planning or lack of planning is the cause of our current dilemma, we could do well to question whether current planning is adequate. There is an integrated resource plan in place, which outlines how growth in demand could be met. But at the moment it remains a paper outline, and there is no firm planning beyond the existing build projects.

One of the concerns with the IRP is the management of the different technologies. Although the plan mentions capacities, there seems to be no co-ordination between the different components, particularly the renewable components. Planning for renewables is based entirely on capacity with little attention given to generation patterns and location. For instance much has been said about the advantage of geographic diversity, and how complementary wind generation patterns can be combined to give a continuous supply of power, but there is little evidence that this has been taken into account when issuing plans for wind energy. In fact one could say that it has been left to the market and benevolence of nature to sort this out, in the hope that it will just happen.

Since the introduction of renewables into the grid worldwide, problems seem to have been left to some future development to sort out. Initially when penetration was low, the opinion was that the grid would handle variability, as it well did. As penetration increased however, the capacity of the grid became strained until problems with variability became more significant. This has reached the proportion in countries with a high renewable penetration where there is now a call for coordination of planning between interconnected countries.

The latest thinking seems to be that the future smart grid will sort this all out. However the smart grid cannot generate electricity, it can only connect together various sources in an intelligent manner, and no amount of smartness in the future can compensate for dumb planning today.

In the wake of all this concern comes the fact that there is an increasing interest worldwide in solving the problems of variability at the source, by incorporating distributed storage systems and other smart technologies with renewable energy systems to create “smart” renewable energy systems. The goal is to make the system more dispatchable, but also to allow interaction with the grid to provide frequency stability and reactive power, in a step which almost pre-empts the smart grid initiative, by moving features of the smart grid into the generation field.

Most systems are being installed by utilities or IPPs, at their own expense, but an interesting twist is the recent announcement that the German government is to offer incentives for the installation of distributed storage systems in their network. No details are available but presumably this would be combined with PV or wind systems. The question that arises here how will payment be affected for stored energy?

One could only imagine that a differentiated tariff scheme would have to be introduced which offers a premium for energy delivered outside of the PV or wind generation window for instance. This could ultimately lead to a demand driven tariff scheme, based on a “spot market” price, which is a significant move away from the “forced off-take” system which compels purchase of renewable energy when it is generated.

Most objections to on-site storage in the past use the “high” cost as a factor. However, with more and more research into distributed systems, the cost of storage, like other RE components, is likely to decrease. Energy storage is regarded by some as the game changer in the evolution of renewable energy systems, which will facilitate the transition from “dumb” to “smart” renewable systems, and assist the move towards smart grids.

The opportunity exists for this country to leapfrog the process that others have gone through and incorporate “smart” renewable systems into the network from the start. With the third REIPP window now being delayed and the whole process being reviewed, there is an opportunity to incorporate at least some “smart” systems into the program. The SA demand curve with its pronounced evening peak offers a great opportunity for stored renewable energy, (in the form of a peaking PV plant?) which could probably be delivered at a price comparable with the cost of running the peaking gas turbines. Are we going to let this opportunity slip by?

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