Opportunities and Challenges of the Evolving Smart Grid

November 1, 2016 | 10:00 a.m.

November! Already?

It’s that time of year where organizations all over the world begin to seep into a period of holiday hibernation. But for those of us working in the space of smart cities and everything they entail, this month is an exciting one.

Two international events this month promise to bring together industry experts and enthusiasts from around the globe to celebrate the evolution of the smart city and discuss new ways to tackle the decades-old goal of building a more sustainable, connected world using innovative ideas, products, and services.

The Smart City Expo World Congress will be held in Barcelona November 15-17. The expo has seen tremendous growth year after year since its inception, with overall attendance more than doubling from 6,160 visitors in 2011 to over 14,000 in 2015. Last year, 568 cities around the world were represented at the expo.

Rounding out the month is the IoT World Forum being held November 29-30 in London. The conference brings together players across all Internet of Things verticals, including automotive, manufacturing, security, consumer electronics, and, of course, the smart grid. Speakers from companies including IBM, Sprint, and Google will discuss how the opportunities and challenges of the market are shaping the IoT industry, and how the industry is shaping the market.

As a software company centered around the idea of joining these devices, building on the smart grid, and making the connections that enable smart cities, we are inspired to be a part of this community of innovators working together to create a more efficient, sustainable world.

What exactly is a smart city?

A quick Internet search will prove that the definition of a smart city is an elusive one. One could argue the variations are a result of different perspectives, but we think it’s a product of innovation.

Advancements in technology undoubtedly drive the potential, adoption, and development of smart cities around the world. While early smart city visionaries may have dreamed of addressing sustainability and resiliency needs from the top down, the availability and affordability of technologies, including the Internet of Things (IoT), has created opportunities for consumers to participate in smart city performance in ways that were unimaginable in the not-too-distant past.

Participation in open energy markets could be a profitable way for everyday citizens to play an active role in the progression of smart cities, but there is still much to be accomplished from a regulatory standpoint before that opportunity can be made available.

The impact of energy on smart city realization

It’s no secret that rapid technological advancement expands opportunities for everyone. The innovation of energy-related products and services has a wide range of benefits for governments, corporations, consumers, and the environment.

Especially in the United States and other highly developed countries, where the availability and reliability of electricity is expected, the advancement of solar generation technologies has had a profound impact on the ability for individuals and organizations to participate in the once-monopolized energy market.

Today, everyday consumers in these regions can use solar panels to generate renewable energy to offset electricity costs and provide clean energy resources to utilities. Solar technology has been around long enough now that utilities, regulatory agencies, and financiers have adapted to allow distributed solar energy resources to saturate the market. Solar generation products are more available and affordable for consumers, which is good for everyone.

Right? Well, mostly.

If renewable generation technologies were the final answer, we’d all be in good shape. However, no advancement in generation technology can change the intermittent and unreliable characteristics of many renewable resources. In the case of solar power, the sun will continue to rise day after day, but it will also continue to set night after night. Cloud cover or other environmental factors also impact the ability to forecast and depend on the power we generate from renewables daily.

The shift in focus toward the development of energy storage technologies may seem to unveil the answer to our intermittent renewable energy problem. However, with this solution comes a new set of challenges. Large-scale energy storage technology is a relatively new endeavor, although many of the same principles used in the development and production of common household batteries can be applied.

It would appear to the typical consumer that the progression of this technology is well on its way. And for the most part, it is. The undeniable impact of energy storage products on sustainable energy realization has led to funding for development and deployment projects around the world. New financing mechanisms to promote market penetration are improving and the future is looking bright.

So, does this mean that smart cities are just around the corner? Perhaps, but there is still much work to be done.

Challenges of the smart grid

In the U.S., electricity is most commonly delivered by utilities through a centralized distribution structure. The combination of the aging grid and rapid innovation of new technologies poses significant problems for utilities and, therefore, consumers.

With solar integration, specifically, utilities have not only had to adjust to the new intermittent energy resources available to them, they’ve also had to determine how to deal with the impacts to their revenue streams and power reserves.

Unbeknownst to many consumers, utilities must purchase and reserve energy for distribution to consumers based on a set of educated assumptions. Each day, the utility uses weather forecast data, historical usage patterns, and other factors to determine how much power will be required from its customers the following day. If those estimates are higher or lower than expected, the reliability of the grid can be undermined.

For the most part, new technologies and IoT devices and sensors have provided opportunities for utilities to better forecast consumption needs and provide cleaner energy. But the same innovations have increased complexities that must be addressed within the already complex electrical grid system.

The missing link: automation and intelligence

The complexity of traditional electrical grid architecture – with different entities representing generation, transmission, and distribution of energy – and the varying regulations governing the delivery and consumption of energy, makes integrating new technologies a burden.  There is simply too much data and too much variation in resources to manually operate the smart grid or a smart city.

The future success of transforming established cities into smart cities relies on artificial intelligence. Unlocking data points trapped within our energy systems and applying advanced algorithms to process the information provides a level of insight into these complex systems that is otherwise unattainable. But this is only the first step.

Using that information, computers can process real-time data inputs, such as cloud cover approaching a solar field. Rapid response signals are sent to lower the energy consumption of lights and other equipment within the system to reduce the overall load on the electrical grid until conditions return to acceptable levels.

Advanced machine-learning algorithms take this automation to the next level. Overall, energy management software development is progressing from data analysis and pre-programmed response, to optimizing system performance using data inputs and outputs over time. Put simply, intelligent software uses historical data to learn and deploy better ways to utilize energy generation, storage, and consumption devices. This means all energy stakeholders, from energy sellers to energy purchasers, benefit from this intelligence.

Where do we go from here?

Advancements in software development for this purpose look promising, but as with the solar sector, there are sure to be challenges ahead. Security and scalability are two priorities that must not be overlooked by developers or their customers. To implement and grow a smart grid, communications must be secure and the architecture of the solution must be able to scale.

The smart city of the future will undoubtedly include a more open energy market, in which even small-scale clean energy generators can play an active role. In our next post, we’ll discuss the developments toward sharing energy in an open market and the challenges that lie ahead.

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