Updated: Nov 20, 2019
The energy sector is in the midst of a transformative and disruptive change. This change is driven by Climate change concerns and technological innovations that promise to improve the efficiency of the entire energy system while reducing emissions. There is an imminent shift towards a clean, digital, distributed and dynamic energy ecosystem from a static and inefficient energy system.
A traditional power system consists of a large number of interconnected Alternate Current grids, which perform three functions: generation, transmission and distribution of power. These unidirectional power systems generate energy mostly from burning coal or other carbon fuels, polluting the environment in this process. This traditional grid worked well for more than 100 years, but now with an increase in energy demand, this grid is failing to actively generate, transmit and distribute energy in an efficient manner. With groundbreaking innovations, these linear value chains supporting one-way power flow from a centralised generation plant would now give way to two-way flow value chains, which are dynamic, digital and decentralised.
This decentralized power generation would enable efficient management of energy sources and better coordinate between producer and consumer. In some cases, consumers will become producers, leading them to be called ‘prosumers’. A prosumer can accurately design the energy system best suiting its own needs, and can thereby manage a more efficient flow of energy. Emerging technologies based around renewable sources, which provide cleaner and cheaper energy, are at the focal point of the energy disruption. A combination of increased demand for energy, emerging clean technologies and innovative business models will give rise to the new generation of the grid: Grid 2.0. The three important tenants of the new generation grid are: distributed energy assets; battery energy storage systems; IOT enabled sensors and metering infrastructure. These three tenants combine to unlock a dynamic and resilient grid, which provides the cheap and clean energy, whenever it is required to.
Distributed Energy Resources (DERs) involve the deployment of renewable and non-renewable assets at the fringe of the consumers grid, which are sized and scaled according to the consumer’s requirements. There is an incisive penetration of solar cells in the energy ecosystem, owing to continued research in this field, bringing solar tariffs down consistently. Other renewable and hybrid technologies, which produce cleaner energy than the coal-based power plants would be deployed. Decentralisation of power generation removes transmission and distribution losses to a large extent: These power losses are one of the biggest problems plaguing the traditional grid today.
Battery Energy Storage Systems (BESS) provide a completely new dimension to the grid: Storage of energy. Now one can produce energy at the time when it is the cheapest to produce and store it in highly efficient storage systems, enabling one to use energy at demand. A lot of research and development is undergoing in this field, with innovative storage technologies being produced. They are still considered to be expensive, but continuous research is paving way for economical storage options.
The third and the most critical component of the new generation grid is the Internet of Things (IoT) enabled sensor and metering infrastructure. These IoT enabled devices touch upon all aspects of energy - generation, transmission and distribution. IoT already has a penetration in the energy ecosystem through the smart meters and smart thermostats. A smart grid would comprise entirely of IoT enabled components, which would have communication protocols to transmit data collected real time to a central device. Once deployed, the constant flow of data from these IoT devices will open up a lot of avenues for analysis, resulting in the process of continuous improvement of the smart grid. IoT enabled devices will fuel the rise of prosumers, who would now be able to look at their energy systems in real time and understand their own requirements. It will create a resilient grid with intelligent devices interconnected through a system and responding to each other in real time. IoT enables proactive and automated load shifting and energy efficiency in homes, commercial buildings and industries. It helps to build efficient demand responses mechanism, which enables the delivery of cheaper energy to consumers.
India has recently seen a surge in microgrid projects and investments. However, most of these projects are primarily limited to the rural electrification space. Smart Microgrids have the potential to disrupt and completely replace the traditional power grid in residential, commercial as well as industrial settings also. The plug and play nature of smart microgrids has the undeniable potential of revolutionising the face of the energy sector, as new technologies get ready for commercialisation and can be easily plugged into the grid.