The smart grid is an enhancement of the 20th century electrical grid, using two-way communications and distributed so-called intelligent devices. Two-way flows of electricity and information could improve the. Contact online >>
The smart grid is an enhancement of the 20th century electrical grid, using two-way communications and distributed so-called intelligent devices. Two-way flows of electricity and information could improve the...
The smart grid is a planned nationwide network that uses information technology to deliver electricity efficiently, reliably, and securely. It''s been called "electricity with a brain," "the energy internet," and...
A smart grid is an electricity network that uses digital and other advanced technologies to monitor and manage the transport of electricity from all generation sources to meet the varying electricity demands of end users. Smart grids co-ordinate the needs and capabilities of all generators, grid operators, end users and electricity market stakeholders to operate all parts of the system as efficiently as possible, minimising costs and environmental impacts while maximising system reliability, resilience, flexibility and stability. Most of the technologies involved have already reached maturity, and so tracking investments provides insights on levels of deployment.
Investment in smart grids need to more than double through to 2030 to get on track with the Net Zero Emissions by 2050 (NZE) Scenario, especially in emerging market and developing economies (EMDEs).
Countries and regions making notable progress in deploying smart grids include:
With around 80 million km of transmission and distribution lines in place world wide today, electricity networks are the backbone of secure and reliable power systems. Over the coming decade, transmission and distribution grids are expected to capture a rising share of total power sector investment in the NZE Scenario, in recognition of their critical role in supporting modern power systems and clean energy transitions.
Building electricity networks, especially high-voltage interconnections, is very complex, both in terms of permitting and construction. Line route plans and reports have to be drawn up covering the entire length of the network, conditions and specifications have to be assessed, and stakeholders must be engaged. This results in long lead times for these projects.
Meanwhile, deployment of variable renewables and electrification of other sectors is moving fast, leading to strains and pressures in power systems. Real‐time knowledge of system health through the use of smart grid technologies allows for fuller utilisation of existing resources, enables networks to operate closer to their true limits without sacrificing reliability, and makes it easier to contain system failures into smaller areas and prevent cascading power outages.
While the transmission grid is already well-digitised, digitalisation of the distribution grid is still lagging in many countries, limiting the availability of real-time information. Despite the deployment of residential smart meters having advanced in recent years and even having reached 100% in some economies, such as China, the share is still very low in many countries.
Innovative digital infrastructure is gaining prominence in electricity grids, both in distribution and transmission, with around 7% growth in investment in 2022 compared to 2021.
The distribution sector accounts for around 75% of all investment in grid-related digital infrastructure, through the rollout of smart meters and the automation of substations, feeders, lines and transformers via the deployment of sensors and monitoring devices.
Investment in digitalisation in distribution also includes specific digital tools, such as Distributed Energy Management Systems (DERMS). These are able to exploit the potential of the increasing volumes of flexibility resources such as small-scale renewables plants, EV charging points and battery energy storage systems to solve local network issues for short-term grid needs, such as voltage regulation and congestion management. In addition, such tools can help distribution system operators (DSOs) to optimise their long-term investments, considering the flexibility potential of Distributed Energy Resources (DER) as an alternative to network reinforcement, including in grid-planning activities.
Considerable investment and progress has been made in electric vehicle public infrastructure, which continued to grow significantly in 2022, rising by more than 75% during the year. Smart grids can effectively integrate electric vehicle charging into the grid by providing the visibility and control needed to mitigate grid bottlenecks.
In the transmission sector, digital investment is devoted to the digitalisation of equipment such as power transformers, the automation of substations and the development of flexible alternating-current transmission systems (FACTS) and advanced sensors as phasor measurement units, allowing for faster and more flexible operation and improved control, monitoring and optimisation of the power grid.
Another aspect that is becoming increasingly important is networks'' disaster resilience. More and more new digital technologies are being deployed, such as Spark Prevention Units that help prevent forest fires (such as bush fires in Australia) or technologies that combine geographic information and satellite image analysis to predict potential damage to grid assets, e.g. damage from falling trees or branches near power distribution lines.
Investment in electricity grids increased around 8% in 2022, with both advanced and emerging economies accelerating investment to support and enable the electrification of buildings, industry and transport, and to accommodate variable renewables in the power system. For example:
Investment in electricity grids needs to average around USD 600 billion annually through to 2030 to get on the NZE Scenario trajectory. This is almost double the current investment levels, at around USD 300 billion per year.
International partnerships in the area of smart grids address specific needs of the systems across the world, with the main goal of sharing knowledge and best practices on technologies and business models, and discussing the results of implementation in each partner country within the network. Programmes focus on developing engagement between countries to co-operate on the creation of international standards for smart grids, on stimulating manufacturers to develop and export their smart grid products, and also on increasing user acceptance.
Examples of existing international collaboration programmes on smart grids include: the International Smart Grid Action Network (ISGAN), the Digital Demand-Driven Electricity Networks Initiative (3DEN), the Global Smart Energy Federation (GSEF), the International Community for Local Smart Grids (ICLSG), the ERA-Net Smart Energy Systems (European Transnational Programme Cooperation), the Smart Grids D-A-CH (Germany-Austria-Switzerland) and the European Task Force on Smart Grids.
Interconnectors are also important as a tool to boost international power trading and power flexibility, which can allow for efficient resource sharing, particularly for hydropower, solar PV and wind. The Western African Power Pool (WAPP) is a good example, where technical integration of the 14 member countries covered by WAPP is almost complete. Interconnected WAPP countries exchanged 6 TWh in 2021, or 7% of total power generated.
Despite being regions with anticipated rapid growth in demand for energy services, EMDEs are falling behind in modernising their electricity grids to support the energy transition. This lack of investment can result in significant system losses, inefficient consumption of fossil fuels, and frequent power outages.
As a priority, regulators should address the weak financial situation of distribution companies and implement effective investment frameworks such as performance-based regulation. Developing least-cost system plans and improving network tariff designs are also essential steps. Additionally, efforts should be made to reduce operational and commercial losses. International co-operation can also provide additional financial and technical support, including concessional capital, private-sector capital and inflows from international markets.
To avoid grid congestion and ensure the success of clean energy transitions, grid infrastructure additions (grid expansion or enhanced grid flexibility) need to proceed in step with variable renewable capacity additions. The challenge for regulators is to resolve the asymmetry of lengthy grid permitting times and the imperative for shorter lags in implementing renewables.
Public acceptance of large infrastructure developments is another hurdle for grid expansion. Some project developers and authorities have reacted by introducing measures to limit the visible impacts of grid infrastructure, for example by insisting on the use of underground cables instead of overhead lines. Nonetheless, project developers need to pay close attention to the needs of local communities and involve them in the process as early as possible.
Legal and regulatory frameworks should shape a change in mindset, avoiding the risks of under-investment and bottlenecks by improving integrated planning processes (for supply, demand and flexibility) and establishing adequate remuneration to incentivise smart grid deployment.
The complexity arising in the new power ecosystem requires strengthened pathways to digitalisation. Transmission and distribution system operators should continue to facilitate the adoption of novel assets, including technical options such as distributed energy resource management systems, edge control devices, advanced voltage and reactive power controls, network digital twins, artificial intelligence, robots and drones for more efficient operation and management, as well as closed-loop operations and non-wire alternatives, such as flexibility services and distributed stand-alone storage systems.
Power utilities should develop a forward-looking approach to resilience against future potential hazards, such as extreme weather events, wildfires and cybersecurity risks. This new perspective requires ad-hoc resiliency roadmaps including weather-predictive services, fire spread and flood modelling, deployment of sensors and high-definition cameras and other real-time or near real-time situational awareness. Assessing cybersecurity risk is especially important for new manufacturers, vendors and service providers as they design and implement their devices, systems and services.
Electricity grid operators should work towards achieving the United Nations Sustainable Development Goals by reducing the use of raw materials, adopting alternative sustainable materials in grid components, implementing circular solutions for dismantled grid assets (such as recycling and reusing equipment) and protecting biodiversity. These measures can reduce life cycle environmental footprints and increase safety, especially when critical mineral resources, notably for copper, may become scarce and geographically concentrated.
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