Today I continue with Jeremy Rifkin’s Third Industrial Revolution’s forth pillar : developing the use of “smart grids” in electricity production and consumption.
What is at stake?
Remember the TIR’s first pillar is shifting to renewable sources of energy? Yet, unlike fossil fuels and nuclear power, renewables are distributed. It is possible to find them everywhere on the planet, and anyone can access them. The impact is that anyone can become an energy producer and deliver electricity to the grid. It means energy flows now go two-ways: from the traditional energy producer to the consumers and from new energy producers to consumers, while any producer is also a consumer and any consumer might also be a producer. This adds significant complexity to the grid’s job of transporting and distributing electricity from the producer to the consumer.
Plus, as I was saying in my last article, electricity transportation causes energy losses. As a matter of fact, as they’re conducting electricity, the electric cables are heating up and the calories are lost in the surrounding space. The further away you convey electricity, the more of it you lose on the way. So an efficient grid will deliver electricity to the consumers that are nearest to the place of production. The challenge is in identifying these “nearest consumers” and allocating energy distribution in the context of diverse input points and sizes.
That’s where these new grids are called “smart”: bidirectional and localized, they optimize a complex situation and make these decisions in every instant.
So how do smart grids do that?
The first issue to solve is creating and collecting the pieces of information about the production and consumption in every place. Without this information, there is no way to optimize a situation: first know it, then manage it. It is the smart meters’ job: located in every building (home, office, production plant, etc.), they measure precisely and in real time the status of the building in terms of electrical production and consumption. They allow for example to know a lot about the consumption levels and cycles of each building in a given sector or to identify grid disturbances or temporary power interruptions.
The smart meters are by nature decentralized, and so should the decision-making centers become too. It isn’t yet the reality though. Why not? Because our electricity distribution centers are until now based of an energy production mode that is centralised: fossil fuels are concentrated in … and nuclear energy can only be exploited in nuclear plants. These places are therefore the only energy inputs and electricity distribution always starts from there. And this situation will change with the distributed renewable sources of energy.
Now that this is clear, why should the decision-making centers be decentralized? First because the decisions to be made will be extremely complex. It will be about where to convey kilowatt X, produced in point A, in order to be consumed. But also kilowatt Y, produced in point B, and so on with millions of kilowatts, producing points and consuming points, variable production and consumption, and shifting definitions of places as producing or consuming. It will likely be more simple to make decisions for a limited perimeter with limited data. Second because if there is a problem with one decision-making center, the affected perimeter might be taken over immediately by the neighbour centers.
What will be the collateral impacts of smart grids on the electricity market?
I have listed here under a number of benefits and drawbacks that will probably arise from the development of smart grids. These are the issues that will have to be managed during the change process.