Is the Energy Industry on the Verge of a Revolution?
From DER to EVs and Back
The energy industry is not normally associated with rapid innovation and fast moving change. But today this industry finds itself at the beginning of truly revolutionary pressures that threaten to completely transform how the energy industry operates and indeed completely turn the entire business model on its head.
Traditionally the power network was a one-way, unidirectional, network with energy flowing from centralized generation plants to the consumers by means of the power grid. The control network for the grid is equally linear; SCADA is used to allow centralized control centers to control remote substations and generation facilities and grid protection is provided by means of teleprotection. This is all changing.
Distributed Energy Resources (DERs)
The pressure to reduce carbon emissions has resulted in an ever increasing number renewable energy sources (and small scale generation facilities) being introduced. Sources include solar, wind, hydro, heat pumps, gas and many more and these can be located in rural, metropolitan and residential areas. In most cases, the energy generated from these resources is introduced directly onto the grid with little, or no, local storage.
However, as a higher and higher percentage of energy comes from renewables, the energy generated during favorable times must be harvested and stored for use in less favorable times. For example, imagine a very cold overcast January with little or no wind, there would be very little energy generated from the photovoltaics (PVs) and the wind sources and these conditions are normal in many countries in Europe. The key is flexibility in generation, storage and delivery and requires a real time communication and control network is required to create this flexibility.
Electric Vehicles (EVs)
We are at the start of an Electric Vehicle revolution and in 10-15 years we will no longer see the internal combustion (IC) engine used for mass transport on our roads. This transition is likely to be much more rapid than many people expect for a number of reasons test :
- Car manufacturers have bought into adding electric vehicles to their ranges.
- The cost of producing EVs is cheaper than ICs
- The retail cost of EVs is rapidly reaching price (the differential being kept by the car manufacturer, not because they are intrinsically more expensive to produce)
- The running costs (fuel, maintenance etc.) is far less for EVs
- A tipping point will be reached when the second hand value of IC cars is minimal, and people won’t buy a car if they think it’s resell value will be zero in 5 years’ time. This is already happening with the diesel car market
For mass deployment of EVs a whole network of EV charging points is required, these can’t just be at home or in the office as many people don’t have off-road parking or drive to work. Again the keyword is flexibility.
Changing business models
Traditionally, energy companies generated and distributed energy and consumers paid for what they used, either with a relatively static charging model for residential users or a more granular model for business users. The introduction of EVs and DERs will require this model to become far more flexible.
With DERs we see consumers, themselves, becoming small scale energy generators requiring payment for energy they supply to the grid.
With EVs, a flexible tariffing system is required for the EV charging points. These charging points can be at various locations and they must have the ability to be configurable, for example:
- Home charging points should be split from residential consumption to allow different tariffing to be applied, thereby allowing government subsidies to be applied.
- At office charging points again need to be flexible to allow to company to pay for some, all or none of the charging
- Public access charging points, require a secure method for taking payment
We also see that energy companies are more and more active with transactional energy trading. This requires accurate, real time, energy generation data from the DERs and central generation facilities and demand data form all demand sources. The data can then be fed back the central control centre to allow analytical engines to anticipate demand against generation, then buy, and sell the surplus supply on the energy market.
We also see that energy companies are more and more active with transactional energy trading. This requires energy generation data from the DERs and central generation facilities and demand data form all demand sources to be transported back to the central control centre, in real time, to allow analytical engines to anticipate demand against generation, thus enabling accurate energy trading.
EVs have the potential to take this one stage further. When plugged into a charging point, EVs are basically just batteries and suddenly the energy supplier as a vast amount of distributed energy storage facilities which can potentially be used to smooth supply/demand or allow energy to be released for energy trading.
In this decentralized power grid, energy flows in multiple directions and consumers are just as likely be energy producers as consumers. Such dramatic change requires the energy sector to evolve and modernize the communications network that it uses to control its transmission and distribution grid. Energy companies need to move from the static linear communications model used today, to a highly dynamic, many to many, architecture which provides them with the flexibility they require to move their business towards energy 2020 and beyond. And yet this dynamic network requires totally deterministic behaviors to allow the control mechanisms to operate effectively.
In short, the smart grid enabled energy cloud requires a secure, dynamic, deterministic, communications network to securely deliver data and control where and when it is required.