Digital tools can help reduce the need for expensive and time-consuming new infrastructure
UP TO DATE
New regulations are encouraging member states to think more strategically about grid investments, rather than simply building more transmission lines
COMPREHENSIVE AMBITION
A pan-EU policy approach would accelerate DSO digitalisation efforts
KEY QUOTE
Grids should not be the bottleneck to the energy transition.
Grids were not designed for power to flow away from the ends, or edges, via lots of distributed energy resources (DERs), such as solar and wind farms.
Expansion in electrification, from new modes of transport to heating and beyond, requires the installation of many more thousands of electric vehicle (EV) chargers and heat pumps over the coming decades. This will ramp up the demand for clean electricity to flow around the edges of the grid where the end users are located.
Meanwhile, more storms, droughts and other types of climate change-induced extreme weather patterns place additional demands on the pylons, poles, wires, substations, transformers and other physical assets that carry power. Having a system with multi-directional power flows will help increase its resiliency and security.
Decarbonising power supplies, where renewable and low-carbon electricity makes up the majority of electricity transported across networks entails a huge shift in terms of where on the grid energy is produced—from the transmission system to the distribution grids.
BloombergNEF, an energy analytics and research group, estimates the share of power injected into Europe’s distribution grids will increase to 66% by 2050, up from 27% in 2022.
It is no wonder, then, that digital technologies and specialised software have become an increasingly essential tool for managing modern grids.
CONGESTION ZONES
Across Europe, decarbonisation is presenting a similar challenge for grid operators, the companies that own, operate and manage the high voltage transmission systems and those that do the same for regional medium and low voltage distribution networks; congestion.
In the past, a transmission system operator (TSO) might have received a few dozen applications for connections a year. Today the volume can be in the hundreds, the majority coming from new solar or wind farms, but also for EV fast chargers and grid battery storage systems, in addition to the numerous applications coming via distribution system operators (DSOs).
In 2022, Enel Grids, a subsidiary of the Italian utility that owns DSOs, added over 300,000 connections in Europe, mostly for new solar photovoltaic (PV) systems. Around 204,000 of these were in Italy and over 90,000 were in Spain.
In highly constrained areas, where the network cannot take more DERs, or loads, new connections can take many years to materialise, potentially slowing down countries’ net zero transitions.
“Grids should not be the bottleneck to the energy transition. If you can run grids closer to their physical limits you need less space, fewer resources and less time in order for more DERs to be accepted onto the grid,” says Sabine Erlinghagen of German conglomerate Siemens.
PUSH TO THE LIMIT
Digitalisation technologies, for enabling real-time monitoring, communication and control, in combination with software applications, enables grid operators to “see” what is happening on their grid. “When you have observability and controllability over your grid down to the feeder level, the low voltage level, then you can start to manage the grid closer to the actual physical limits of the infrastructure,” says Erlinghagen.
One such technology is dynamic line rating (DLR), which, through networks of sensors across power lines and other assets, constantly assesses the amount of energy carried along lines in different weather conditions and temperatures, so that utilities can maximise how much energy is transported, within safe limits.
DLR reduces congestion on power lines, optimises asset usage, improves efficiency and reduces the cost of operating the grid. It helps grids to accommodate increased solar and wind integration, reducing curtailment for these variable renewable energy sources.
It relies on software algorithms to calculate ampacity, digitalisation for real-time monitoring, communication and control, and grid operators are being encouraged to adopt it through regulatory incentives for cost-efficient grid operation. TSOs adopting it so far include Amprion in Germany, Terna from Italy, RTE in France and Belgium’s Elia.
“Decarbonisation rests on electrification of more loads like EVs and heat pumps as well as the connection of more DERs, so grid assets, using technologies such as DLR, need to be used optimally to accommodate these increases in power flows and more of them. The alternative is to expand, which is expensive,” says Kristian Ruby from trade association Eurelectric.
Another area where digital technology can have an impact is in reducing technical losses. Driven by regulations, such as the EU’s Energy Efficiency Directive, DSOs are being encouraged to take steps to reduce losses; energy that is lost in transmitting and distributing electricity from the power plant to the end consumer.
Siemens calculates that if technical losses can be reduced by one percentage point across the EU, this would negate having to build ten mid-sized power plants. Some countries, such as the UK and Sweden have policies designed to incentivise DSOs to minimise losses.
Compared with DSOs, TSOs already have a high penetration of sensors on assets, which alongside digital and communication technologies, means they have a high level of observability across their systems.
“They know precisely what is going on in every corner of their transmission grid and they can manage that in a very detailed way already. Their challenge is the loss of inertia from having more renewables. They need to build inertia back in. This means bringing the simulation aspect closer to the grid control room in order to counteract glitches in frequency in near real-time,” says Erlinghagen.
“In other words, continuously simulating dynamic developments in grids and foreseeing critical grid states and making this information available to the operators in the control room,” she adds.
CRYSTAL BALL
Technologies in the fields of digitalisation and software are opening up new approaches to the maintenance and operation of grids.
Having smart meters installed with customers and sensors on secondary substations enables E-REDES, mainland Portugal’s electricity distribution grid operator, to see where neutral wire losses can lead to an outage, so it can take steps that avoid the outage. “This is a totally predictive approach,” says João Martins de Carvalho of E-REDES.
“Smart meters allow operators to see where in the network voltage issues are occurring and what resources can be used to resolve them, whether by changing the network topology, acting on devices such as transformer taps or mobilising consumers/producers with flexibility contracts,” Martins de Carvalho explains.
These technologies can also enable more informed decisions in terms of grid planning, such as where to build a new substation, by using more granular data gathered from medium-voltage (MV) and low-voltage (LV) networks, via smart meters, sensors and digital infrastructure, optimising investments in new grid assets or infrastructure.
Increased adoption of digitalisation, in combination with EU policy that aims to drive further renewables uptake through community energy initiatives, is also defining new roles for DSOs, including E-REDES.
In energy communities, a local entity manages generation from local renewables, say a solar installation on a nearby industrial roof, to meet local demand. Rather than selling surplus output in wholesale markets, in energy communities, the power is shared—directed to neighbouring consumers, including houses, to incentivise proximity between generation and consumption, using the local distribution grid instead of the whole national grid.
“This requires DSOs to function as a clearinghouse of data as these scenarios rely on smart meters collecting and sending data every 15 minutes as well as high levels of visibility of the network to see where issues may occur,” Martins de Carvalho says.
PUSH THE LIMITS
Siemens’ Sabine Erlinghagen (left) says granular data levels allow grids to operate closer to their limits
PILOT PHASE
The next step for DSOs is to contribute to system stability. The way to do that is by using flexibility.
“In the Nordics, the UK and in Italy we see experimentation, pilots and early market design coming about. In the US, this is more prevalent already where consumers allow thermostats or EV chargers to be managed by the utility and [then] be compensated,” says Siemens’ Erlinghagen.
E-REDES is hosting a pilot later in 2023 in Portugal, with Piclo, a UK-based flexibility solutions provider, to explore the willingness of consumers and producers to provide flexibility services to address constraints in the distribution network.
In the pilot, the team will identify areas on the network where potential grid constraints can be addressed by flexibility. It could provide E-REDES with an alternative option to building new grid assets or address other specific needs by mobilising customers to adjust their power demand at specific times, at specific points in the network.
E-REDES is committed to harnessing the potential benefits of flexibility but Martins de Carvalho says, in the case of distribution grids, a sense of realism is needed in terms of how big a role it can play, due to the very local nature of grid constraints.
“It is not a silver bullet. It is challenging to run a flexibility market at a very local level in the same way that a TSO system services markets, where there is much more liquidity, compared with a very localised part of the grid with only a few potential providers of flexibility to address a specific need,” he says.
Where flexibility approaches have more potential is as an interim solution, Martins de Carvalho says. For example, an EV charger operator may want to install some chargers, but it could take some time before a new substation in the area is built and for the connection to be completed. Instead, the EV charger can be connected to the grid immediately, but, in exchange, accept the possibility of restrictions, such that sometimes charging will be curtailed or reduced.
“This arrangement implicitly incentivises the operator to charge in times of low demand,” Martins de Carvalho says.
Flexibility procured from DERs can be a more cost-effective alternative to other solutions like grid reinforcement in conditions when congestions or voltage issues arise only occasionally or while developing a grid reinforcement, according to Marina Lombardi at Enel Grids.
LEARN BY DOING
Italy’s ARERA uses testbeds, known as “sandboxes”, to experiment with new flexibility frameworks
NEW RULES
As regulated monopolies, there are strict rules on how DSOs are remunerated or make profits. Traditionally they have been incentivised to invest in physical assets on the network, particularly wires, along Capex models.
But while this approach has worked when grids featured large, centralised power plants, conveying power to end users over the transmission and then lower voltage networks, harnessing flexibility can be a more cost-effective way of managing greater volumes of DERs in decentralised grids, as well as imbalances in supply and demand, without resorting to installing more copper.
The challenge is how to ensure DSOs are interested in tapping into “non-wire” alternative solutions.
Bram Claeys, from think tank the Regulatory Assistance Project (RAP), says the EU is leaning towards this. Regulation (EU) 2019/943 contains provisions, though member states are at various stages of transposing it into national regulations.
“It also appears the Commission is proposing new provisions in the electricity market reform to make system operators less biased to capital investments and to make them communicate proactively about their grids and which locations are more or less suited for new connections.”
He says a good example of a system operator already putting this in practice is Elering in Estonia, which publishes a map of substations with associated costs to connect to them.
TAKE BACK CONTROL
In the Netherlands, grid connection delays are impacting industrial companies that want to decarbonise energy consumption through electrification of processes, as well as EV fast chargers on the MV network, even schools, not to mention residential consumers looking to install EV chargers on the LV network.
To address this, the Dutch regulator is asking DSOs, within current legislation, which pre-dates even the transposed Regulation (EU) 2019/943, to procure flexibility in order to be able to connect new DERs and loads to the grid.
In Germany, its Energy Law allows DSOs to be able to control—or even switch off—EV chargers, heat pumps or older electric heaters on parts of the network where there is an “urgent grid need”. The redrafting of this rule stipulates that if DSOs want to take control of the demand side in this way that they need to digitalise methods and models to be able to accurately see where on the grid they may need to turn down or switch off demand.
However, what it does not do is encourage DSOs to use digital tools and software to better manage their networks through tapping into flexibility, to avoid switching off loads as a last resort, says Jaap Burger, also at RAP.
SANDBOX TRIALS
In Italy, the regulatory entity for electricity ARERA has promoted testbeds, known as “sandboxes”, to experiment with new flexibility frameworks. Enel Grid’s Italian DSO, E-Distribuzione, is launching a project called “EDGE” and has just completed a public consultation on the rules and procedures it will use to buy flexibility services from providers and use these to manage the grid. The trial will take place in the regions of Puglia, Campania, Piemonte and Veneto. The first tenders for flexibility are expected in 2023, as soon as ARERA approves the final project framework.
“The idea of doing regulatory sandboxes is really important because it will result in such a big change to the role of DSOs and, since it also involves other players like flexibility service providers, it is important to test and define the best framework to make it the most efficient and effective for the system,” says Enel’s Lombardi.
Flexibility could be more “economically convenient” in situations where congestion or voltage regulation issues are only occasional, or in cases where network reinforcement is planned, flexibility can be used in the interim to address issues.
“These regulatory sandboxes are not only important to show how to manage and operate flexibility markets and understand remuneration models but also to reveal how much demand or interest there is in providing flexibility services,” says Lombardi.
GOT THE MOVES
Grid operators should tell the market where grids need to be strengthened
TRANSPARENCY BOOST
Besides involvement in the trials, Enel Grids launched “Flexibility Lab”, which brings together technology providers, flexibility service providers, DSOs and TSOs to accelerate implementation flexibility through open and transparent dialogue with stakeholders.
“They discuss innovation and technology challenges to this framework and also how digitalisation should be designed and developed for this new flexibility scenario,” Lombardi says. There are more than 60 stakeholders in the initiative.
The UK is ahead in terms of rolling out flexibility procurement schemes but the list of European markets, including Italy, Scandinavia, France, Portugal and the Netherlands, that are piloting similar schemes is growing. Initiatives, like Italy’s sandboxes for flexibility, will also be important for defining total expenditure models.
“Italy is proactive in pursuing this change but this is only possible because the grid in Italy is at an advanced level of digitalisation,” Lombardi adds.
JOINED UP THINKING
Siemens’ Erlinghagen says that more pan-EU policy would accelerate the adoption of grid digitalisation technologies among the many DSOs across Europe, which number several hundred and range from those with millions of customers to small, local utilities. It would also stimulate more investment from the market side.
“But, if the approach is disparate, with one country doing one thing and another country doing another, investment will not really pay off,” she adds.
Siemens’ policy “wish list” includes modifying the current regulatory framework for system operators, which often leads to more Capex-based investments, to support innovative technology, such as digital twins.
The revision of the Electricity Market Design rules should also enable the development of flexibility assets and consumer empowerment, she says.
Burger from RAP says DSOs in Europe are beginning to become more comfortable about using digital tools and software to do things differently. “There is a cultural change that will start to occur as the move away from the traditional centralised energy system is replaced by a decentralised, automated system,” he says.
“The Commission is giving demand-side flexibility and consequently operational costs a prominent role for local grids as well, both in the Electricity Market Design proposal as well as in the recommendations on energy storage published at the same time,” adds Burger. •
TEXT Sara Verbruggen ILLUSTRATIONS Bernardo França