Smart grids make sense but can Ireland – and the world – overcome the financial realities of adopting the technology? asks CLIFFORD COONAN

THE VISION of the smart grid at work is one beloved of environmentalists and governments all over the world, because it promises a clean revolution in energy generation and distribution. Picture the scene, and it’s easy to see why.

Solar panels and windmills on the house generate power to run the home and if they are making more than they need, the power is fed back to energy provider, or stored in batteries for use when dark. Inside, smart appliances monitor their own electricity use and shut down at times when power is expensive. Inside the garage, the family’s plug-in hybrid car is refuelling using clean, locally generated electricity.

Smart grids are very much in tune with Ireland’s focus on renewable energy technologies and targets, while in the US, the government is giving billions of dollars in federal stimulus money for smart-grid technology, and smart grids have a major role to play in helping the European Union meet its target of a 20 per cent share of renewable energies in its energy mix by 2020.

Smart grids could remove the same amount of CO2 from the atmosphere as produced by all the cars and homes in the US.

“A smart grid in the most general terms is the application of IT technology to the electric power system. Specifically it involves the installation of sensors on the lines of the electric power grid itself,” says Tom Casey, chief executive of Current Group, a US-based provider of smart-grid solutions aimed at increasing the efficiency and reliability of the electric grid while reducing the environmental impact of electric usage.

“These sensors are embedded with chips that detect information on the operation and performance of the grid – such measurements as voltage and current and others. The sensors then analyse that information to determine what is significant: for example, is voltage running too high, or too low?”

When sensors detect significant information they communicate that data back to a central analytics engine, which is usually a software system. That software system analyses the data and determines what is wrong and what should be done to improve performance of the grid.

If, for example, the voltage is too high, the software would detect this and instructs one of the devices already installed on the grid to lower voltage, thereby saving generated power and emissions. After the analysis the software will then instruct a device back out on the grid to change and so to improve performance.

There are about 90 pilot projects worldwide for the concept, and a report by the consultancy McKinsey shows that if deployed worldwide, smart grids could cut emissions by 2.03 gigatons – out of a total 12 gigatons produced annually – and generate energy savings worth €61 billion every year.

Different countries like smart grids for different reasons. “What we’ve noticed is the motivation for implementing smart grids is not ‘one size fits all’,” says Mark Spelman, head of strategy at Accenture, which published a report on smart grids at the World Economic Forum in Tianjin, China.

“In Europe it’s driven by a desire to reduce carbon emissions. In the US it’s to improve the consumer experience. In places like Singapore it’s to develop the export potential,” says Spelman.

There are three general categories of benefits from the smart grid. The first is efficiency, as they reduce costs and emissions. Smart grids also improve reliability, as they can detect power failures quickly.

“The final category is edge integration, which can be anything from reading a smart meter to interacting with the customer’s in-home management system, to rooftop solar panels to electric vehicles, all of which will require interaction with the grid to be successful,” says Casey.

The application of the smart grid to best capture the public’s imagination is the electric car, and all of the big car companies are working on designing electric cars to feed the growing demand for sustainable transport.

These silent, energy-efficient cars have a major role to play in the way smart grids optimise energy networks.

Cars are parked for most of their lives, and the most efficient way is to charge them up during that period, especially overnight when they are least likely to be driven. The process of charging a car at night during the off-peak period is known as “valley filling”.

“The amount of electricity required by an electric vehicle over the course of the year, driven at the average number of miles a car drives in a year, is equal to the average amount of electricity taken by the average home,” says Casey.

In April this year, General Electric and Nissan announced a collaboration to research the impact of electric vehicles on the power grid and technology for smart charging, especially focused on integrating electric vehicles with homes and buildings and looking at the dynamics of charging the cars with the larger electric grid.

General Electric has also introduced a vehicle charger called the WattStation, which can decrease electric vehicle charging time by anything from between 12 and 18 hours to just four to eight hours.

And Google has developed “smart charging” software with algorithms that monitor the electricity supply and control when cars get charged.

“If you’re an electric company and you suddenly have a lot of electric vehicles coming into your territory, it’s like all of a sudden you have millions of new homes built but you don’t have any new facilities, you don’t have any new wires, you don’t have any new transformers or new substations and those things are going to pose a challenge on the grid. If those cars plug in during the peak hour, where it’s already stretched thin, that’s a major problem and could threaten the stability of the grid,” says Casey.

However if these cars plug in at night, when everyone’s asleep and there are no electric devices working, the power to serve them is almost free.

The technology developments should also allow cars to send electricity stored in their batteries back into the grid when it is needed, transforming the family motor into a mini-powerstation.

It appears as if it’s a win-win situation: the planet gets a cleaner environment, consumers pay less for their power and car companies get the infrastructure. But there are hurdles, most problematic being that power companies don’t always benefit.

“We need smart grids for electric vehicles, but the benefits don’t always flow to the utility,” says Spelman. This will delay the evolution of smart grids, says Casey.

Ireland is also moving towards implementing smart grids and there are ongoing trials by the Commission for Energy Regulation and the ESB, but there are questions in Ireland, too, about the financial realities of implementing the smart grid.

To get around this issue, the Accenture report says that a combination of clear and stable regulation and proactive consumer engagement will help create the profitable business models for the power companies, as well as other stakeholders in creating smart grids, such as the IT companies, telecoms groups and other industries.

“There is a risk of lowest common denominator smart-grid rollouts, with basic functionality and limited consumer response,” says David Rouls, managing director of Accenture Smart Grid Services.

“Regulatory conditions must be changed to reward investors for the risks they face and to encourage utilities to integrate multiple low-carbon technologies to demonstrate the art of the possible for smart grids.”