Making electricity smarter
Vice president of industry strategy at Oracle Utilities, Bastian Fischer describes what's next for the 'smart grid'.
"The smart grid wasn't required 100 years ago," says Bastian Fischer. This isn't, he points out, because the physics behind generating electricity has changed much. It's more that a century ago power distribution was designed from an industrial perspective. "You had centralised production close to industrial sites in order to provide local power. That power was then distributed into cities, and before long cities became interconnected." This is, according to Fischer, how the power system grew from local needs to regional and then national networks.
Today it is different, with decentralised contributions from renewable sources that tend to be in places of low consumption: at the edge of the country, away from cities, where there is "more sun, more wind". Another difference is that with renewable energy comes "the decreased ability to plan for dispatch and supply at times when it is needed". The 'smart grid' combines energy supply with an IT and communications network that continuously monitors data about where, when and how much energy is needed. "This is linked together, in an ideal world linking the customer to the supplier in an end-to-end real-time supply chain."
The smart grid is both an evolution and a convergence of existing technologies, and so far has needed no particular breakthrough or disruptive innovation technology change to bring it about. Fischer says: "Smart grid isn't about that. There have been innovations. I'm not saying you can use a 19th century infrastructure, hook it up to an iPhone and there you have a smart grid. There have been innovations in substation automation, step transformers and so on. But for all of those innovations in power, it's really only by linking them to the comms and IT that gives you smart grid.
"This is what makes the grid intelligent, allows the utilities to have visibility and control to the last mile. Integrating new power equipment such as distributed generation or new applications such as electric charging for vehicles – integrating them all into one system, which is aiming to optimise local production of energy to be consumed locally."
The term 'smart grid' is distinctly 21st century, although depending on where you research, you might find early isolated uses of the term in the closing decades of the 20th. "But smart grid is fundamentally a 21st-century phenomenon," says Fischer, who is keen to identify the main players, the stakeholders in the next generation energy supply chain. "These include the incumbent utilities, because historically they have been the suppliers of energy and the infrastructure that connects energy. But also it will be the customers – residential or industrial – who contribute to the energy supply chain." He says that today, with the potential for decentralised investment decision taking, anybody from municipalities to private individuals can invest in small-scale distributed generation (such as PV cells on your roof) to large-scale renewables.
Fischer says that in the end we are all winners, as the fundamental objective of smart grid is to maximise the use of renewable energy and to minimise the waste of resources such as fossil fuels. "I think if we look at the total picture, smart grid is a technology that takes us to sustainable energy supply."
Late in 2011 Oracle Utilities took delivery of a document it had commissioned to assist in identifying challenges facing the energy market. 'The Future of Energy Report' is the result of a series of surveys with different energy service providers, consumer advocacy groups and industrial clients at the "forefront of research and development". The aim of the report, according to Fischer, is to identify what we can do now to achieve our longer-term objective of sustainability in a carbon-controlled supply chain. And although Fischer admits that we are looking at a "broad and long-lasting roadmap that is sometimes difficult to get an immediate grasp of", one of the findings is that the tools and means to implement an efficient energy delivery system already exist. "Some of those technologies are combined for the maximisation of renewable energy in local networks. Now that is a very short sentence. But what we are talking about is the decongestion of the network."
Fischer reins in the flow of ideas. "I need to make a disclaimer here," he says, "because there will always be congestion, and there will always be situations where you'll have big industries requiring bulk energy, which needs to be transported. But, what decongestion means is essentially more efficient networks. This is because you now don't have to step up the power and step it down again. It means that you're increasing the share of renewable energy, avoiding peak-hour plans, reducing fossil fuel dependency."
Consulting the Oracle
So what is Oracle contributing to the smart grid? "Oracle is an IT company, and so we provide everything from data storage to computing, middleware, database and industry applications. We talk about solutions to help the utilities on the customer side of things. Helping them to manage the entire customer lifecycle. Enabling them to design, calculate and invoice competitive energy products."
The other big area of involvement is on the smart grid. "This is an area for advanced energy products. If you have products with rewards schemes on renewables, or upper limit thresholds, you need accurate measurement of all those elements to provide a product that you can accurately bill at the end of the month. On the grid, we are supplying products that help to optimise the low-voltage distribution networks, to identify disturbances (such as irregularities in the voltages and frequencies) and outages, and to take corrective action."
An element of the smart grid automation Fischer is interested in is actively monitoring lines and grids. "You can't have humans monitoring every low-voltage section. And so these are applications for substation automation over distributed grid, balancing and management. Also, we are providing analytics in the form of energy analysis: from analysing the grid on a spatial level to making assessments on investments, analysing the stress to which certain networks are exposed."
Energy is a people-centric and people-intensive business. And according to Fischer it will remain so, despite the new age of the smart grid. "Our customers are people. We need to respond to their needs, and this can only be done by other people. We will always do our business where there is infrastructure, and where there is infrastructure there is the need for maintenance, installation, upgrade and fault troubleshooting. And so with the utilities the fundamentals of the business haven't changed. The three fundamentals will remain people, assets and infrastructure."
No amount of smart technology will ever change that characteristic, says Fischer. But, he is quick to point out that the number of personnel is not increasing exponentially with the amount of data, which is. "The smartness will allow a much more granular management, particularly of the local low-voltage supply, because that is where the innovations are taking place. The customer needs to have a means of interacting, and that is where the technology comes in and where the customer will make choices."
The future generation
Fischer agrees that there is a fundamental environmental imperative attached to how we approach the future. We simply can't go on consuming finite resources without understanding the price of that. He repeats that "the physics of generating electricity has not dramatically changed over the past 20 years, arguably the past century. But let's focus on the past two decades. We have PV, wind, and the transformation of raw commodities (gas, coal, uranium) into electricity. That hasn't changed and it will not change in the near future".
Fischer says that the industry has always been about the different processes of transforming a commodity into electricity. "What is changing is the ratio of the sources, and the ability to optimise the portfolio."
While we may be consuming more energy, this is to a certain extent offset by the fact that we are becoming, or will become, more energy efficient. "Increased consumption will be compensated for by more efficient cars and homes. Also, there will be more and more legislation, standards and regulation pitched at rewarding energy efficiency. We need to optimise the energy sources that are the most climate-friendly. That means first shifting away from the very old and expensive (in terms of climate maintenance) coal and oil generation, towards much cleaner natural gas, which is a much more attractive proposition to the utilities."
For long-term baseload energy generation, nuclear is a reliable and climate friendly source, says Fischer, whose positive view on the technology has not been fundamentally affected by the accident in Fukushima. "There were a couple of countries that took differing decisions. But the ratio of the contribution for nuclear generation over the next three decades will remain the same.
"If you are asking me what is the key breakthrough in generation, I would say storage and the ability to optimise the mix in the planning. We need to design, plan and operate our portfolio of energy generation assets for the next 60 years. If you look at a nuclear power plant, it operates over this cycle: 10 years to commission, 40 in operation and 10 to decommission. And this is one example where we can learn from history. But for the short-term we must operate the assets we have at maximum efficiency."
The future of energy : facts and figures
* 115% – the projected increase in global electricity demand by 2050, created in part by the industrialisation of emerging economies
* €7tr – estimated cost of realising an 80 per cent reduction in greenhouse gas emissions through a near zero-carbon power supply over the next 40 years
* 77% – the United Nations Intergovernmental Panel on Climate Change (IPCC) believes that as much as 77 per cent of the world's energy demands could be met by renewable energy by 2050
* £7.3bn – potential savings in UK customers' fuel bills over 20 years from the roll-out of smart meters beginning in 2014
* €150m – annual cost of power interruptions for European Union businesses
* $4.1bn – estimated value of the smart grid analytics market by 2015, a rise from $356m
* 30% – by 2050, wind and photovoltaic energy will contribute approximately 30 per cent each towards EU electricity consumption
* 6 million – estimated number of people in Europe employed in the renewable energy sector in 2050, up from 500,000 today
* 100 million – global sales of electric vehicles by 2050
* €1.5bn – funding available from the German government reserved for research and development projects in the ICT industry, essential to developing the country's smart energy system in the future
* 2.6GW – solar power capacity installed in Spain in 2008: more than the entire solar capacity installed worldwide in 2007
* 15% – the Desertec Foundation estimates that a network of concentrated solar-thermal power plants throughout the Middle East and North Africa could provide Europe with 15 per cent of its energy requirements
* 30% – reduction in gas and electricity use in homes and offices in the Netherlands by 2020
* 34% GDP – revenue from clean tech industry in Denmark
* 100,000 tonnes per year – CO2 to be captured at Europe's single largest polluter, the Belchatow power plant in Poland, by 2015
* $10bn – equivalent cost per year of the 12 per cent of energy in Russia that is lost in transmission
* £8bn – estimated revenue from offshore wind in the UK by 2020
Source: The Future of Energy report, 2011
The smart grid: putting intelligence into infrastructure
The smart grid brings two-way digital technology to the energy network, creating an intelligent system better able to balance power supply and demand. Full deployment will result in a more robust and resilient infrastructure, one that suffers fewer outages and possesses the necessary flexibility to accommodate renewable generation, electric vehicles and other low-carbon technologies. Customers will also be able to make more informed decisions about their energy use and its associated costs. Successful deployment of the smart grid could save €52bn annually in the EU alone, both by reducing losses from electricity distribution and by enabling greater energy efficiency.
Source: The Future of Energy report, 2011
Bastian Fischer : energy security on the cyber age
Energy security is fundamentally all about cyber security. As more and more communication and IT gets linked into the energy supply chain it is also the aspect that causes most concern. This is because security is never perfect. Even with the most advanced military police and secret services, there is a residual risk to our lives.
In terms of cyber security there have been examples where the most secure environments – in the financial sector – have been breached. Also, there are well-known breaches in the network of gaming consoles. Now, these infrastructures are extremely secure, and if there are breaches they must be recognised quickly, and their impact on the physical world limited immediately. In gaming this does little to damage society – it just blocks your entertainment. In the world of finance it does have an impact on the functioning of society, because you can't transact business.
But if these breaches are trickling down into the world of physical energy there could be serious consequences. Oracle has been aware of cyber security and we are contributing to making these financial systems safe. But security comprises many elements, which are sometimes beyond the control of one single entity. But there is a philosophy within the DNA of the governance of Oracle, which is to make all those security elements work together to secure the infrastructure. We are providing a lot of security elements to the industry and are contributing to a very reliable infrastructure. We understand the lessons learned by the financial sector, and we are adopting them in the energy sector.
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