21st May 2014 Economic and Policy Forum Meeting Smart Grids: Increasing energy flexibility John Scott john.scott@chilternpower.com 1 Very briefly My background: Electricity Distribution & Transmission planning and operations Manager of the UK National Control Centre Engineering Director of National Grid Company in UK Technical Director for Ofgem, the GB Energy Regulator Director, Network Innovation for KEMA Consulting Ltd Independent Consultant, Chiltern Power Limited IET: Institution of Engineering & Technology – Energy Policy Panel 2 What characterises today’s power grid in GB ? 3 GB Electricity Transmission Commodity type Market Customers (homes) ~28m Generation Capacity 76 GW Peak Demand ~60 GW Annual electricity consumption ~ 300TWh Regulated Networks Transmission Max Voltage 400 kV 1 System Operator + 3 Trans. Owners Distribution Max Voltage 132kV 14 Licenced Distribution areas (6 companies) 4 GB Electricity Distribution Network Owners 2013 Electricity distribution carries electricity from the transmission system and delivers it to consumers. Typically, it includes 132kV, 33kV and 11kV power lines, substations and transformers, and low-voltage (230/415 V) distribution wiring. In GB it does not include meters. 6 Owners but 14 Licensed DNOs 5 Regional Commercial Largely passive, domestic users Few intelligent appliances Local Home Good sensors Two-way power flows Real time data Advanced processing Transmission and Systems 2 way data Sparse sensors Regional distribution Limited data Limited processing Limited two-way data Sensors 1/ 2 hr data Retail processing Limited one-way meter reading No sensors Fit and forget One-way power Transmission is a well-instrumented active network National LESS DATA, LESS INTELLIGENCE, LESS CONTROL BUSINESS AS USUAL Commercial Properties Local distribution No electronic data transfer Manually read dumb meters No electronic data transfer Homes 6 © The Institution of Engineering and Technology 2011 It’s all well established, so what’s changing, why are ‘smarter grids’ on the agenda? Note - Google offers 3 million references for ‘smart grid’ (and 35 million for ‘smart meter’) 7 The great centralised grids of today… are largely‘one-way’ systems One-way power flows CENTRALISED GENERATION Remote generation Little communications Limited automation TRANSMISSION NETWORK A mainly passive network Delivering electricity to passive consumers DISTRIBUTION NETWORK DISTRIBUTION NETWORK DISTRIBUTION NETWORK Generation must always match Demand: there is no storage in the networks The traditional paradigm: RESIDENTIAL DEMAND RESIDENTIAL DEMAND RESIDENTIAL DEMAND RESIDENTIAL DEMAND “Generate what is Consumed” acknowledgement 8 The great centralised grids of today… the challenges ahead Less- predictable generation Less- predictable loading New hydro & marine Ageing networks Quality of supply & resilience Energy losses New nuclear with larger single loss risk Distributed Generation: central & dispersed PV small and large scale Off-shore and on-shore wind generation More complex system balancing CENTRALISED GENERATION Lower inertia power system TRANSMISSION NETWORK DISTRIBUTION NETWORK RESIDENTIAL DEMAND Customer energy efficiency & smart meters DISTRIBUTION NETWORK RESIDENTIAL DEMAND Larger single loss Network stable operation DISTRIBUTION NETWORK RESIDENTIAL DEMAND Two-way power flows & raised FLs RESIDENTIAL DEMAND Network loading & voltage limits Demands AND sources Heat Pumps & Air Con Loss of demand diversity EV charging Larger single loss: 1320 (Size B) increased to 1800 for new nuclear acknowledgement 9 The great centralised grids of today… the solution opportunities ahead Less- predictable generation Smart metering & displays Generation must match Demand ‘DR’ Demand Response But now, within a new paradigm: Aggregation & VPP “Consume what is Generated” Less- predictable loading More complex system balancing CENTRALISED GENERATION Lower inertia power system Active Distribution Networks Larger single loss TRANSMISSION NETWORK Real time ratings Network stable operation Electricity Storage Power Electronics Synthetic Inertia DISTRIBUTION NETWORK DISTRIBUTION NETWORK Two-way power flows & raised FLs DISTRIBUTION NETWORK Network loading & voltage limits New materials Condition Monitoring DC embedded & interconnection RESIDENTIAL DEMAND Home automation RESIDENTIAL DEMAND Smart Vehicle Charging RESIDENTIAL DEMAND RESIDENTIAL DEMAND Plus Hearts & Minds….. Demands AND sources Loss of demand diversity acknowledgement 10 Networks for sustainability & security.… the smart grids of tomorrow Less- predictable generation Smart metering & displays Less- predictable loading ‘DR’ Demand Response The Smart Grid Concept Aggregation & VPP Active Distribution Networks Lower inertia power system A new architecture for the power system Real time ratings Electricity Storage Power Electronics More complex system balancing Larger single loss Network stable operation Two-way power flows & raised FLs Synthetic Inertia New materials Bi-directional power and information flows Condition Monitoring DC embedded & interconnection Network loading & voltage limits Home automation Smart Vehicle Charging Demands AND sources Plus Hearts & Minds….. Customer Engagement Loss of demand diversity acknowledgement 11 How might these flexible ‘smart grids’ interact with the Built Environment? 12 Network Solutions - all voltage levels A Wide Range of Potential Solutions: Built Environment linkages are highlighted here 1. D-FACTS, STATCOMS, power electronic 14. Electricity storage: interfaces, home and controllers for voltage management community scale The Smart Grid Concept 2. Solid State tap changers (inc 11kV/LV) 15. Potential for hydrogen production and 3. Interconnection of D-STATCOMs to create storage a controllable DC network overlay 16. Microgrids for storms resilience with 4. DC networks in homes and buildings, grid intentional islanding utilising DERs networks with multi-terminal systems 17. Phasor Management Units (PMUs) and 5. Superconducting and other designs of 18. Wide Area Monitoring, Control and fault current limiters protection (WAMPACs) 6. Soft Open Point power electronics at LV 19. Forecasting, modelling and visualisation 7. Intelligent switching logic and adaptive for planning /operational timescales protection and control 20. State Estimation for network observability 8. Power electronics for synthetic inertia 21. Active Network Management (ANM) 9. Solid State transformers 22. Home/Building Energy Management 10. Smart EV charging for homes, streets, car Systems, Smart Meters & Displays parks, intelligently co-ordinated 23. Custom Private Networks 11. EV charging: contact-less & mobile 24. Hybrid technologies including hydrogen, Bi-directional power andand gas 12. Cyber-secure communications and heat information flows interfaces 25. Smart Communities, Smart Cities and the 13. Waveform cleaning and phase balancing Internet of Things 13 However, there is another pressing agenda for the power grid… 14 Adequacy of GB generation capacity? (i.e. WITHOUT RENEWABLES) Closure of nonFGD coal stations New nuclear build still not confirmed Renewables are incentivised EMR not yet complete Barrage / Lagoon proposals De-mothballing? New CCGT?? Shale gas??? National Grid contingency actions 15 Renewable power sources? Renewables are growing in total capacity Some 20GW peak In 2013 renewables delivered 14% of GB energy use Today, dependent on the wind and sun Importance of forecasting, interconnectors, geographic spread and, in the future, demand flexibility and storage. 16 Will Smart Grids and new flexibility really happen, do the costs/benefits stack up? 17 DECC – the UK Department of Energy & Climate Change Ofgem – the GB electricity and gas regulator Developments in GB: The Smart Grid Forum Shaping a shared Stakeholder View The DECC/Ofgem Smart Grid Forum was established in April 2011 • Identify future challenges for electricity networks; • Facilitate the exchange of information and knowledge; • Guide the actions of Government/Regulator; • Help stakeholders better understand future developments; • Identify actions to facilitate the deployment of smart grids; • Track smart grid initiatives in Europe and elsewhere. 18 Smart Grid Forum Workstream 3: Evaluating Conventional and Innovative solutions To develop and populate a model that demonstrates the value of smart grid innovative solutions in distribution networks to address a range of low carbon scenarios The model is generic - it does not know network connectivity or calculate load flows or voltages It does reflect the characteristics of the DNOs networks across GB It does examine alternative investment strategies Many modelling parameters are user-definable The Headline modelling results Smarter strategies appear most cost effective Summary of Present Value of gross totex of distribution network investment (2012-2050) 20 Some Sensitivity Cases ‘No Clustering’ could reduce costs by 60% A 5% change in the reinforcement threshold could increase costs by 40% 2nd generation EVs could increase costs by 50% 21 But…. 22 The IET’s warning flag… … and its challenges to the power sector 23 The IET Position Statement The December 2013 Position Statement summarises groundbreaking work A classic problem of an ‘invisible’ risk because it grows incrementally There is evidence already of changing GB system behaviours - hence The IET’s call for action This is not a panic message, but solutions will require sustained effort and fresh thinking Indeed, a ‘shock to the system’ after 80yrs of grid development The work here is at a scoping level, not determining solutions. The Power Network Joint Vision (PNJV) Position Statement and Report are available at www.theiet.org 24 The GB view: Material Changes Ahead The graphic summarises the rising complexity anticipated for our power networks The scale of change is no longer incremental and will move the power network significantly beyond the bounds of its original Systems Engineering Best practice in other sectors ensures a ‘Whole Systems’ approach through the role of a System Architect But no party has this role in today’s industry 25 What is Ofgem doing to incentivise network innovation? Answer: more than any regulator world-wide! 26 The Low Carbon Networks Fund A new regulatory incentive to stimulate smart grid deployment £500m over 5 years (2010-2015) for bold network innovation projects Tier 2 funding a significant amount comprising £64m p.a. to encourage a small number of ‘flagship’ projects. Funds will be held centrally, with DNOs competing for funding. Tier 1 funding of £16m per year is allocated between all DNOs (according to customer numbers) on an annual basis. This allocation will allow each DNO, with minimum bureaucracy, to undertake several small scale projects. Customers will fund a maximum of 90% of the cost of projects. After 2015, these incentives will become the NIA Network Innovation Allowance, and NIC Network Innovation Competition 27 European Comparators Smart Grid Projects 2012 • Excellent messages for GB’s positioning in Europe • A strong platform for innovators, exports and growth? 28 A Practical Example of smart grid innovation 29 An example: UKPN ‘Flexible Plug & Play’ (33kV network) Ackg’t: Sotiris Georgiopoulos, UKPN An Active Network Management system (ANM) An example: UKPN ‘Flexible Plug & Play’ Ackg’t: Sotiris Georgiopoulos, UKPN Where might all this be leading? Is this in fact pointing to bigger changes than smart and flexible electricity…. 33 The Direction of Travel? Smart Community Energy Storage Smart Transport Smart Grids E-Health Care Smart Buildings Smart Customers 34 The Direction of Travel? Smart Community Energy Storage Smart Transport Smart Grids Smart Buildings E-Health Care Smart Customers Smart Community Energy Storage Smart Transport Smart Grids E-Health Care Smart Buildings Sensors Everywhere Communications Everywhere Intelligent Processing Big Data Analytics Smart Customers Peer to Peer “The Internet of Things” …Digital Cities Smart Community Energy Storage Smart Grids E-Health Care …Intelligent Cities Smart Transport Smart Buildings Smart Customers Producer/Consumers Prosumers …Smarter Planet (IBM) …Digital Urbanism (CISCO) Communities & Collaboration …Sustainable Cities (Siemens) 35 The Consequences? Sensors Everywhere Plus some new risks and opportunities for misuse…. 1 Communications Everywhere Intelligent Processing Big Data Analytics Peer to Peer Producer/Consumers Prosumers Communities & Collaboration “The Internet of Things” Massive cost savings, new services and convenience Connecting Everything with Everybody Nearly Free Goods and Services: ”Close to Zero Marginal Costs” 2 ‘Nearly Free’ is already with us: Non-profits, publishing, communications, information, 3Dprinting, on-line higher education (MOOCs), Apps for smart phones, car sharing, spare room sharing…..renewable energy If so, our traditional economic model (competition by price) can no longer be dominant A New Economy is ahead: A hybrid of Collaborative Commons + Capitalism. What impact for Business? 36 The Characteristics Sensors Everywhere Communications Everywhere Intelligent Processing Big Data Analytics ENERGY LOGISTICS COMMUNICATIONS “The Internet of Things” Peer to Peer ‘NET NEUTRALITY’ Producer/Consumers Prosumers Communities & Collaboration SHARING ON A MASSIVE SCALE MORE ABOUT ACCESS THAN OWNERSHIP BUILDING SOCIAL CAPITAL ENTREPRENEURIAL OPPORTUNITIES SUSTAINABLE QUALITY OF LIFE OPEN, DISTRIBUTED, COLLABORATIVE OPEN & DISTRIBUTED BUSINESS ACCESS FOR ANYONE, ANYWHERE, ANYTIME MORE ‘QUALITY of LIFE’, LESS ABOUT ‘GDP’ 37 A growing body of work… Watch his lecture from the RSA in London: http://www.thersa.org/events/audio-and-pastevents/2014/a-world-beyond-markets Delong & Summers, The New Economy Univ of California, Berkeley, 2001 http://ideas.repec.org/a/fip/fedkpr/y2001p1 1-43.html 38 These changes may take decades, but they are fundamental. Q – do the construction, engineering, and technology sectors have insights to offer? If so, they must ‘reserve their rights to play’. But, do they currently have sufficient influence? 39 Some key messages to summarise 40 In Summary The landscape for power grids is set to change: 1 Disruptive challenges are ahead: smart solutions will be needed 3 Whole-systems thinking is needed: a System Architect for the grid? 2 Consumer & business engagement will be key to the changes 4 We can expect Near-Zero Marginal Prices: changes ahead for our economy … real impacts for business and wider society. 41 Smart Grids: Increasing energy flexibility Thank you for your attention Discussion John Scott, Director, Chiltern Power Ltd. www.chilternpower.com +44 (0) 7771 975 623 42 Spare Material 43 Is today’s framework creaking already? • Fundamental design changes require a whole-systems view: but no one has accountability as the System Architect • Rising inter-dependencies and complexity: electricity, heat, gas, comms, big data, transport, and consumers at scale • The skills deficit: future support for customers, clients and supply chains • The consultation burden from DECC and Ofgem (now 1/week from DECC, 4/week from Ofgem) • Short termism: electoral cycle times & the Senior Civil Service rotational system • Is there sufficient strategic capability? 44 Membership List (by invitation) at April 2014 Hannah Nixon (Joint Chair) Ofgem Sandy Sheard (Joint Chair) DECC Mike Calviou National Grid Dave Openshaw UKPN (DNO) Steve Johnson ENWL (DNO) Phil Jones CE Electric (DNO) Mark Mathieson SSE (DNO & TO) Chris Harris RWE nPower Ashley Pocock EDF (Supplier) Tim Rotheray CHP Association John Scott Chiltern Power Judith Ward Sustainability First Jim Sutherland Scottish Power (DNO) Robert Symons WPD (DNO) An open selection process for membership was run by the Government/Regulator jointly Yselkla Farmer Chris Welby John Mulcahy Gavin Jones Duncan Botting Steve Unger Nick Jenkins Ben Davison Sarah Bell BEAMA Good Energy British Gas Electralink PB Power Ofcom Cardiff University OLEV (EVs) DSR Coalition 45