Power Providers Should Deploy Future Oriented Solutions In Order to Prosper

The power sector must aim to create an environment which supports the broader adoption of new solutions.
Published: Thu 11 Sep 2014

A major share of the power infrastructure in the European Union’s traditional industrialised countries is reaching its end of life at a rapid rate. There is also uncertainty around the life cycles of “first of their kind” assets. In addition, to accommodate for the ongoing shift to renewable and distributed generation infrastructure adjustments and upgrades must occur.

It is therefore clear that there is a growing need for up to date information on the state of power assets and maintenance, as well as structural replacements and upgrades. These should be prioritised according to the assets’ importance to the entire system. This is according to Dr Jochen Kreusel, Group Senior Vice President, Head of Industry Sector Initiative Smart Grids, ABB, who will be attending the upcoming European Utility Week conference.

Power systems of the future

In an exclusive interview with Engerati, Kreusel goes on to explain what the power systems of the future look like in the face of distributed generation and demand response programs.

He says that there will be large quantities of small, but active elements in the system and these together will become critical to the power system and therefore need to be considered in system control.

He points to the penetration of distributed photovoltaics in the German power system as a good example. “Although the majority of installations in Germany are small roof-top solar units, their total installed photovoltaic capacity is measured at over 35GW. It is therefore a critical amount for the entire European interconnected power system. The distribution management systems of the future will therefore have to deal with the same level of complexity that we get from transmission system operations today.”

Preparing for the energy transition

Across Europe, it is evident that the traditional business model is no longer sufficient as it struggles to meet new generation capacity demands, explains Kreusel. “At first this is a big challenge in particular for the generators, but in the end for me it is obvious that there must be a solution for the provision of enough firm capacity - and this also means opportunities.”

Kreusel points to the virtual power plant (VPP) approach as a good example since it allows distributed generation to participate for instance in control power markets. He explains that today, utilities are viewing the VPP as an option to integrate renewables in their portfolios. VPPs bundle smaller power stations, usually using renewable sources, to reach a size where they can become players in the lucrative market for balancing power - producing and selling electricity at higher prices when demand rises unexpectedly. VPP’s like the one operated by Next Kraftwerke, are set for steep growth globally, according to consulting firm Navigant. Next Kraftwerke runs one of Germany's largest virtual power plants with ABB’s control system monitoring biogas, wind and solar plants and reacting swiftly, sometimes within five minutes, to changes in the grid.

Kreusel adds that generators, wholesalers or retailers must understand the impact of an increasing share of generation capacity with no variable cost. They also need to understand what the absence of firm capacity means for their business models.

“The conclusion from this for me is that utilities need to develop their view of the future power system with fundamentally different economics than in the past and where they want to be in this world.”

He continues by saying that the situation is different for network businesses since their business models are not yet challenged in principle (at least not yet, he adds), but the complexity and the need for coordination between transmission and distribution level is increasing.

“Moreover there is a permanent need for grid adaptations driven by the rapid growth of distributed generation. Efficient tools for analysis and decision support both in planning and operation are key to deal efficiently with these challenges.For example, solutions for efficient analysis of distribution networks are needed and are now available to provide strategic support to operators to recognize and evaluate the consequences of increasing penetration of distributed generation – economically and without complex network calculations. ABB offers an optimal solution with “Smart Planning”.

“With a longer perspective in mind, grid operators in my opinion must consider the impact of decreasing the costs of distributed generation, in particular photovoltaics and battery energy storage on distribution grids. This applies especially in rural environments where land is usually cheap and grids are weak and expensive due to the low density of load.”

In conclusion

“As a representative of a technology supplier I would, of course, like to discuss the interplay between the challenges and opportunities, including new business models, and technical solutions at the European Utility Week conference. Also, I believe it is really important to talk about what is required to create an environment which is supporting the broader adoption of new solutions. Time is running out but in many cases we still see a reluctance to deploy future oriented solutions - we would like to get a better understanding of this viewpoint in order to help overcome this situation.”

ABB plans to present its leading smart grid solutions at European Utility Week 2014: Asset Health Center, Energy Portfolio Management, Distribution System Optimization and Outage Lifecycle Management solutions as well as solutions for efficient network management, advanced power protection and grid automation.