A new report from the German Ministry for Economics and Energy, Smart Energy Made in Germany (available in German), presents the results of five years of test projects in six model regions throughout the country. These tests involved key technologies and business models to comprise an "internet of energy" -- dubbed E-Energy. Siemens is proud to be one of many companies and universities involved in these projects.
The report's bottom line: Smart grids, smart meters, and other types of information and communications technology (ICT) can yield many crucial benefits, such as:
- Reduced costs for transmission and distribution grid investment.
- Lower peak demand and total consumption.
- Improved consumer comfort.
- Enhanced integration of distributed renewable generation resources.
Importantly, this report contends that providing an ICT infrastructure for energy is society's responsibility.
Germany's Economics and Energy Minister, Sigmar Gabriel, calls the transformation of the electricity supply system one of the main challenges for Germany -- where energy supply is shifting from large central power plants to decentralized, renewable production.
He adds that E-Energy (via smart grids) can reduce the costs of this transformation while simultaneously opening up new markets and enabling new business models. E-Energy also includes consumer-friendly smart home technologies.
The report presents several key findings in three areas:
1. Power transmission and delivery:
- Reliability. Grids supplemented with ICT (smart grids) can fulfill demands for higher reliability. They can also help balance supply and demand as generation becomes increasingly decentralized, especially in the distribution network.
- Optimization. Adding smart grid technology can more effectively utilize existing transmission and distribution network capacity. Networks can be differentiated in time and space through a traffic-light model: green = sufficient capacity, yellow = constraints in transporting power, red = critical. These indicators can then improve the coordination of market mechanisms and network operations.
- Outage management and prevention. ICT can help identify and localize network constraints. Specific network technologies, including sensors, automation, and regulation equipment, can work together with systematic management of power flowing to and from the grid to resolve local problems. The result is a substantial reduction in grid reinforcement costs.
- More renewables on existing infrastructure. Intelligent power inverters and grid sensors enable the connection of significantly more renewable generation without the need for grid reinforcement.
2. Electricity consumption:
- Financial incentives. Time-varying rates and other financial incentives for energy producers, consumers, and "prosumers" (consumers who produce renewable energy) can better match power supply and demand. Intelligent controls and economic incentives can enable consumers who also produce energy to use it in a way that complements the needs of the power grid. Again, the construction of an ICT infrastructure enabling these functions is a societal responsibility. [Emphasis added]
- Engaged, empowered consumers. Energy consumers, depending on customer type, can be motivated to reduce peak demand by up to 10% through the use of time-varying rates or other contractual arrangements providing financial incentives. In some cases (with especially high incentives) even greater peak reductions are possible. Currently, per-customer savings range up to 100€ per year, and average about 60€ ($82 USD at current exchange rates).
- Automation. Automated response to energy price signals can minimize consumer discomfort and increase customer acceptance. An example would be an "energy butler" in a smart home. The connection between the communications technology in the home and outside the home is case specific -- but in E-Energy, IP-based connections are the leading approach. EEBus has been created as a quasi-translation protocol for various in-home communications protocols.
- Data visualization. Smart meter data can be translated into visual representations of energy usage behavior. This can reveal energy savings opportunities and enable consumers to reduce total consumption (not just peak demand) up to 10%. For businesses, a savings potential of 20% is possible.
- Peak demand reduction. Businesses and large homes can reduce their peak demand by around 20%, sometimes higher -- much more than is possible for average-sized private homes. Furthermore, businesses with on-site thermal storage capacity (such as supermarkets or refrigerated warehouses) have proven to be the low hanging fruit of demand response -- and they're already being engaged economically today.
3. Energy production:
- Expanding options. Renewable generation can be more seamlessly and broadly integrated into the electricity grid through intelligent networks, load forecasting, and leveraging flexibility. Better control of peak inflows of decentralized and intermittent renewables (wind or solar) can increase -- and sometimes even double -- a power grid's capacity to accommodate even more renewable resources.
What's next? This report makes the case for a rapid and comprehensive build out of Germany's ICT infrastructure -- from smart grids to smart meters to smart homes. Hopefully the next step beyond these experiments will be implementation.
Read more at Smart Grid Watch!