Challenges

Figure 2 : Demand Side Management with PV integration

Grid operators manage energy production based on the historic principle: “supply follows demand” where energy production is flexible to follow demand. Central fossil generation has served demand everywhere in the grid. If the energy system is to be converted to renewables, two major changes need to be observed: widely used energy sources such as wind and solar power depend on weather conditions and cannot guarantee supply when it is needed, and these plants work best if many small ones are spread over a large area. The amount of fluctuating RE he can integrate is then limited by the flexibility of the other sources. As their share shrinks as RE grows, new rules and market models are needed to ensure that demand and volatile supply match: “demand follows supply”.

For example, in mini-grid powered by diesel generators, the amount of fluctuating RE that can be integrated is limited by the flexibility of the diesel generator. As a guideline, 30% of peak penetration can be achieved which results in an annual RE share of 7-10%. Dedicated PV-Diesel hybrid controllers can shift this limit to approximately 20% RE share.

The new paradigm must therefore be based on volatile production and strong involvement of decentralized prosumers (energy consumer partly or fully producing their energy). It is unlikely that the new grid will be a mere development of the existing one: The transformation will be comparable to that of the telephone system when the internet arrived. Future energy solutions address this issue through three main ideas: 

  • Storage integration: storage by batteries can “hide” RE volatility, but is limited by technical constraints, cost and complex integration.
  • Demand Side Management (DSM): this aims to adapt consumer demand through various methods. In PV environments the consumption can be adapted to match more sunshine at midday, for example.
  • Smart grid: Intelligent grid management secures supply with volatile energy by coordinating DSM, storage and residual fossil generation.

Most smart grid concepts are currently based on massive Information and Communication Technology (ICT). A smart meter controls and analyzes energy consumption (households and industry), is connected to aggregators via communication networks. This approach has the following limits: 

  • High transaction cost, particularly for emerging economies
  • Complexity of a “distributed real time” system (additional cost)
  • Regulation complexity (adding more rules to already complex framework)
  • Difficulty to protect consumer privacy
  • Insecure: the more IT we integrate, the easier it is to hack.

Dubose said [former chief of the Justice Department's Computer Crime and Intellectual Property Division]. "Government officials say there's plenty of evidence that hackers have made their way into the 200,000 miles of transmission lines that provide electricity to more than 300 million people.” Coral Davenport (2013): Why the Smart Grid Might Be a Dumb Idea, National Journal (27/06/2014)

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