The regions which are experiencing the highest percentage of self-consumption of decentral- produced electricity struggle to collect the grid remuneration. Grids can end up being comparable to huge highways, over-sized to cope with rush hours, and that less and less people use, leading to inflationist tolls for the fewer remaining drivers.
Electricity storage solutions (lithium-ion batteries, which cost is also falling according to a “Moore‘s Law” effect, or hydrogen, not mature yet when it comes to economically avoid curtailing the production of renewable electricity) can create “buffers” between generation and injection of wind and solar electricity into the grid, creating some degree of “controllability”.
However, the only convincing way out of these challenges is to introduce proper financial incentives and suitable market mechanisms to foster “virtual grids” and “virtual power plants” ie to ensure some adaptation of demand, storage and supply will be triggered to avoid shocks on the grid and to find more ecological and economical balancing solutions.
For example, the ‘substation of the future’, digitally enabled and eco-friendly, for advanced control and automation of power systems, will be key to balance regional and decentralized power supply, storage and demand. The share of Artificial Intelligence and Internet of Thing (AIoT) and operational control systems, run by highly skilled operations teams (all associated costs mostly sitting in the OPEX category) will be much higher than in the traditional CAPEX-heavy solutions (ie investments in transmission and transformers physical assets). However, what most grid regulatory environments cope with, to date, is physical CAPEX, excluding “smart” mechanisms supported by AIoT optimization.
We would summarize our recommended way out by: “more fiber, less coper”. This would mean a pervasive use of “smart” technologies to create and unlock new sources of flexibility. The combination of Artificial Intelligence and Internet of Thing allows to gather information about demand and supply but also weather and historical patterns, to better model and predict future balance challenges and, finally, to anticipate, schedule and execute smoothing actions. Such action can consist in differing peak loads (e.g. smartly scheduling the time of charging of an electric car, knowing cars sit idle 95% of the time) or orchestrating smart storage to retain and reinject electricity timely. Grids have been smart for many years already, but they were designed to handle different configurations (top-down centralized and controllable generation, no decentralized generation and no prosuming, no massive electro-mobility). So, in order to address the “new normal”, full use of available devices and data (in respect with GDPR1 and other data privacy expectations) is needed, combined with relevant incentives and rewards and supported by multi-dimensional investment programs. In the lack of proper coordination of all those dimensions by the Public Powers and the regulators, we may end up with a “zero paper” effect : we stopped printing pages to create the next challenge in congesting massive data centers with stored emails!
With the right systemic design and implementation, technology can reconcile “green” and “growth” and our core belief is even that, thanks to ongoing innovation’s adoption, “green can feed growth”.