Challenges and opportunities of power systems from smart homes to super-grids
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The world’s power systems are facing a structural change including liberalization of markets and integration of renewable energy sources. This paper describes the challenges that lie ahead in this process and points out avenues for overcoming different problems at different scopes, ranging from individual homes to international super-grids. We apply energy system models at those different scopes and find a trade-off between technical and social complexity. Small-scale systems would require technological breakthroughs, especially for storage, but individual agents can and do already start to build and operate such systems. In contrast, large-scale systems could potentially be more efficient from a techno-economic point of view. However, new political frameworks are required that enable long-term cooperation among sovereign entities through mutual trust. Which scope first achieves its breakthrough is not clear yet.
KeywordsRenewable energy Sustainability Scaling Transformation of energy systems Socio-technical complexity
Introduction to the challenges ahead
The integration of intermittent energy sources in the power system creates manifold challenges and problems, which have not been overcome yet. Breakthroughs in system design, transport and storage technologies, as well as economic organization are necessary.
The distributed nature of renewable generation contradicts the traditional power system structure with large centralized plants. This contradiction opens the discussion whether a new fundamental design is necessary. On the one hand, decentralized generation suggests shifting to small-scale systems, whereas the intermittent nature of generation favors large-scale systems. To facilitate discussion, we categorize the various approaches in three scopes, which roughly refer the geographical scale: local, national, international.
Local scope: the local scope reaches from individual homes to cities. The discussion is focused on politically or privately motivated plans to become energy autonomous. Furthermore, decentralized technologies like photovoltaic (PV) have reached grid parity which allows for cost reductions through own production.
National scope: at the national scope, governments can set the agenda for energy policy and regulation. The current setting of these conditions is a result of political decisions in the past (e.g., the Renewable Energy Sources Act in Germany) and national objectives for the future (e.g., increase share of renewables, meet greenhouse gas emission targets).
International scope: the discussion at this scope is led by the awareness that a larger system reduces the integration challenge due to smoothing effects from variable generation of wind and solar. Furthermore, system planning at this scope enables the participation of larger areas with a high potential in a common European market (e.g., high PV-potential in southern countries; high wind potential in northern countries; large storage potential, e.g., in Norway).
In all three scopes, the integration of fluctuating renewables is being realized currently. Which scope(s) are to be preferred when trying to develop towards a more sustainable energy supply is a point of active discussion. By themselves, visions on each scope are reasonable.
A widely accepted new fundamental power system design does not exist yet. Current discussion is largely limited to individual proposals and demonstrations of individual solutions. The question is then what the general solution will look like: top-down or bottom-up? The top-down solution would create a new system design as a result of new regulation following a pre-defined master plan. In a bottom-up solution, a new system would emerge from individual projects. Regulation in that case would adapt to new issues as they occur. The path which will finally be chosen is not obvious at the moment. What became quite obvious in recent years is that decisions of individual countries, like the strong growth of intermittent, renewable energy sources in Germany, are not without impact on the neighboring countries. This leads to the observation that decisions on any scope cannot be made independently from one’s surroundings.
This paper shows and discusses results of energy models which are developed and used at the Institute for Renewable and Sustainable Energy Systems at Technische Universität München. The mentioned scopes are addressed by multiple approaches.
Challenges and opportunities of different system granularities are discussed and brought into a theoretical framework. As a conclusion, we identify a trade-off between technological and political challenges depending on the investigated scope and system sizes.
In recent discussions about the future electricity supply, the phrase of energy autonomy came high to the agenda. The idea of very local energy and electricity systems can be approached from the perspective of smart homes, where individuals want to be independent of grid supply by generating electricity with PV and combined heat and power (CHP) plants, up to the scale of cities and political regions that claim to develop plans for getting independent of external energy supply.
Short literature review
The literature on this topic is broad and we focus on several aspects here that analyze the techno-economic possibilities for renewable integration in decentralized electricity systems.
There is research in the direction of energy autonomous homes that tries to figure out the maximal degree of autonomy that can be reached by decentralized supply. Much of the research in the field focusses on the German market as feed-in tariffs triggered PV installations on many homes and people are now thinking about new business models including increased self-supply. Staudacher (2012a) investigated whether autonomy could be economically beneficial and found that there is no chance for profitability in the current system with current price structures. In Staudacher (2012b), the same authors show that the PV/Battery systems would allow a degree of autonomy of 50–60 %, but values higher than that can hardly be achieved. Quaschning (2012) found that even though fully autonomous electricity supply will not be economical, the addition of PV systems in homes can be very helpful in reducing the electricity bill. The employment of electric heaters helps utilize excess electricity and improves profitability.
Increasing the system size leads us from individual homes to small microgrids. Marnay and Venkataramanan (2006) show several advantages of microgrids that include the chance for combined heat and power plants (CHP) to be employed efficiently, increasing reliability of supply, and a centralized planning of the entire grid. Hatziargyriou et al. (2007) give an overview of past and ongoing research in the field around the globe. They find differing foci and drivers for research and applications in different places. Whereas in Europe environmental benefits are most important, other regions are researching the topic because of reliability reasons. Our research has to be seen in the European context with a focus on chances for integration of renewables and the chances to get independent of electricity delivery from utilities.
The study of energy autonomy in cities is part of the broader study of urban metabolism, last broadly reviewed in Kennedy et al. (2011) and recently extended by Pincetl et al. (2012). The idea is to focus on a city’s input and output flows of goods and energy. The ultimate goal is to develop closed cycles for each major flow, resulting in a sustainable operation of the whole system. Lund (2011) investigates techno-economic aspect of satisfying significant parts of urban energy demand using a spatial–temporal model and case studies for the two cities Helsinki and Shanghai. He finds that power-to-heat technologies, together with sufficiently sized local thermal storage could greatly contribute to higher RES integration on the local scale.
Own research: Model/scenario description
In order to show the challenges that lie ahead for decentralized electricity systems, we show scenario results researching the level of autonomy that can be reached by PV systems in individual homes, in small communities, as well as in cities. Two different models are applied for the research presented here.
The first model that is applied to individual homes and small communities is a linear optimization-based dispatch model that finds a cost-minimal solution for the dispatch of storage, electricity from grids, and CHP power plants. Real-world data for 15-min electricity load were available. Furthermore, generation time series for PV plants was used as developed by Janker (2015). A description of the model and the data applied can be found in Huber et al. (2013a).
The second model operates on the district to urban scale. It is an optimal planning model for urban district heating networks. Given are locations and prices for heat generation, as well as peak and annual data for heat consumption per building. Demand data are aggregated to up to 104 street segments to arrive at a manageable mixed integer linear problem. A detailed mathematical description and case study are given in Dorfner and Hamacher (2014).
Own research: Findings
Future: Chances and regulatory problems
A fully renewable-based system seems hard to be achieved at this local level. However, there will be several advantages of the small-scale systems that should lead to research efforts in several directions: Small-scale microgrids seem to be a promising approach for increasing the autonomy and the security of supply. Microgrids will require new control architectures requesting research into that direction. Another highly important technology that requires research is decentralized storage. Therefore, one major goal of research on storage should lie in trying to achieve cost reductions. The chances for the integration of renewable energies at the local level are limited and fully renewable systems seem difficult to be achieved even at the level of cities. Power-to-heat technologies, together with thermal storage, can increase the achievable integration of local RES shares. While technologies set limits for arbitrarily high shares of renewables at this level, the regulatory framework and individual incentives are already allowing to increase the utilization of solar PV and decentralized storage. The major challenges are thus technology driven and generating electricity at local level will possibly lead to increased costs of supply.
The country scope regards the integration of the increasing amount of fluctuating renewables as a national challenge. One technical integration measure, which can be established independently without international agreements, is large-scale electricity storage.
Intermittent power sources show variations on various time scales with the diurnal and the seasonal variations being the most obvious ones, but also weather phenomena lead to variations of a couple of days (Heide et al. 2011). Storage capacities need to reflect these variations. Pumped hydro, compressed air, or new thermal storage options offer storage capacities for a couple of hours, allowing diurnal storage. Seasonal storage can only be achieved by very large pumped hydro plants or chemical storage options like hydrogen. Decentralized options like batteries and super-capacitors turned out to be too expensive in the past (German Energy Agency 2010). New developments that leverage new technologies or simply economics of scale might alter this picture. One such example is the recent announcement of Tesla, a producer of electric cars, to build a factory for stationary battery storage systems that are to be sold at an unprecedented low price (Tesla 2015).
Short literature review
Several studies (DLR 2010; UBA 2010; VDE-ETG 2012) analyze the future perspectives for storage technologies in Germany. They try to quantify the storage demand in the German electricity system until 2050, whereas the assumptions with respect to the development of load and renewables differ in a small range. Despite identical starting conditions, the results differ significantly because of varying models and input data. Therefore, the results are difficult to compare and a reasonable interpretation requires closer knowledge of all details, implying need for own research.
Own research: Model/scenario description
Own research: Findings
Future: Chances and regulatory problems
The study shows that on the diurnal and seasonal time scales, new storage options need to be developed. The seasonal storage options require a conversion of electricity to chemical energy. In a very simplified view, the process could be divided in two steps: the production of hydrogen from electricity and the refinement of hydrogen to a storable commodity. Both process steps need technical and economic improvements in order to be extended to large-scale applications.
Pumped hydro storage can provide diurnal storage but the potential is limited. Alternatives are either compressed air plants like AA-CAES and Electro Thermal Energy Storage (ETES), or decentralized options like batteries or super-capacitors. For AA-CAES, high-temperature compressors and high-temperature heat storage options need to be developed. Certainly, breakthroughs are expected here in the coming years.
Despite these technological challenges, national governments have regulatory power to both foster more research and change regulations in a way that puts a higher value on storage in the power system.
Finally, we are widening the scope to transnational concepts of future electricity systems. The interchange between countries requires large transmission capabilities that can be provided by setting up a so-called super-grid. The term super-grid describes mostly a power grid spanning over a whole continent. In most cases, another layer, mostly designed as high-voltage DC grid, complements the “conventional” high-voltage AC grid.
Historically, energy policy has already been a strong driver of forming the EU. Forming the European Coal and Steel Community (ECSC) in 1951 and EURATOM as part of the Roman Treatise in 1957 marked the beginning of the process European integration. In the recent past, the liberalization of the electricity market in 1998 and the gas market in 2000 as well as the introduction of the European Union Emission Trading System (ETS) needs to be mentioned.
Short literature review
Research on continent-wide electricity systems has already been conducted extensively. Concerning analysis of generation patterns, research was done that investigates optimal mixes of wind and solar generation for the whole European continent. Heide et al. (2010) found an optimal mix of 55 % wind and 45 % solar generation for Europe based on minimizing excess electricity. Schaber et al. (2012a, b) found that the optimal mix depends on the grid extension: With better grid integration, the optimal share of PV is lower. For a system with 60 % renewable and a fully extended grid, the optimal share of PV is found to be only 15 %.
Grid extensions play a very important role when aiming at a European power system with high shares of renewables. Schaber et al. (2012a) found that backup capacity requirements and overproduction can be reduced significantly when setting up large transmission capacities. In Schaber et al. (2012b), the same authors emphasize the importance of grid extensions for different regions across Europe. Grid extensions will help the backup capacities to be economically viable and thus help incentivize investments. Becker et al. (2014) added the inter-temporal dimensions and analyzed the system development until the year 2050. The results confirm the positive effects of transmission grids for even longer time horizons. Rodríguez et al. (2014) investigated scenarios with exactly 100 % supply of wind and solar and find that a transmission grid that has 11.5 times higher capacities for inter-country connections allows to earn the complete benefits of international cooperation. Steinke et al. (2013) also investigated 100 % renewable scenarios and the results confirm the line of arguments even when storage options are considered.
Advantages of a European super-grid go beyond reducing overproduction and reducing backup capacities. Huber et al. (2014) analyze different mixes of wind and solar with regard to required flexibility for balancing the residual loads. The authors thereby found additional benefits from large transmission lines that lie in reduced ramps and, therefore, an easier balancing of generation and load.
One step beyond, research on even larger systems was conducted. Czisch (2005) investigated the chances that super-grids offer for an easier integration of large-scale renewable energies. He found that a fully renewable system is possible at moderate costs when Europe and North Africa are connected. Aboumahboub et al. (2010) as well as Chatzivasileiadis et al. (2013) investigated scenarios with a super-grid that not only spans across a continent but across the whole world.
All those studies found benefits from international cooperation in Europe and even globally. Our own research presented here focuses on the benefits for Europe as well but additionally considers generation possibilities in North Africa and Middle East and therewith extends the previously mentioned studies.
Own research: Model/scenario description
In order to estimate the positive effects of this transcontinental power system, the model framework URBS is applied to find a cost-optimal infrastructure allocation for the electricity supply in the EUMENA region (European Union, Middle East, and North Africa).
Own research: Findings
Future: Opportunities and regulatory problems
The literature review as well as own research clearly showed positive effects of setting up large transmission capacities. Such systems would require cost-effective and efficient transmission technology that can be high-voltage DC lines. Research should therefore be undertaken in this direction. We also showed that wind will be the favored technology in the scenarios and should be a focus or research and development as well. Huge storage capacities are not required when aiming at those systems, as balancing occurs from interregional differences of generation patterns. This fact also allows for large centralized base load plants that could be nuclear fusion in the far future.
Large-scale transmission grid extensions, enabled by mutual dependency between countries could be a very promising approach. Maybe it is even the best option from a techno-economical perspective, but its limitations arise from socio-political constraints. At this moment, even the European Union faces challenges to uphold trust among members. Energy is essential for the functioning and competiveness of countries and thus pushes nationalism in many member states. Still, stronger cooperation could have many benefits for all participating countries. Especially countries that face severe economic challenges could profit. Creutzig et al. (2014) already discussed similar scenarios in detail and found energy cooperation to be a beneficial stimulus program for struggling EU members. Southern countries like Greece, Italy, Spain, and Portugal have the highest unemployment rates but very good sites for renewable generation and electricity export. Altogether, it can be said that international cooperation has many potential benefits but political obstacles. Research and policies should try to solve those issues and establish a profitable energy cooperation.
Until now, the European cooperation is still challenged by national peculiarities, while the ETS suffered from a decay of prices making it a toothless tiger. If these challenges can be overcome, the European solution offers a long-term low-cost path, which should encourage European bodies to strengthen a unified European energy policy including greenhouse gas emission reduction, promotion of renewables, and a common infrastructure build-up. A new energy policy pushing for renewable energy sources and emission reduction could be a major European project of the future which might at some point turn out to be as important as the ECSC was more than 50 years ago.
This paper has presented potential solutions to the challenges of future power systems. Depending on the scope of the investigated system, three substantially different “optimal” solutions emerged: First, a local solution on the scale of districts or cities would require substantial investment in technical flexibility options (especially storage). Even with these options in place, only partial independence from a transmission grid could be achieved. Although absolute autonomy would in principle be achievable, the sheer price for the required technical assets will limit such solutions to very few cases. An interesting concept is microgrids that enable decentralized energy management. Second, the national solution aims to balance renewable electricity production and consumption on a per-country level. The national approach already reduces the required short-term flexibility due to smoothing of demand and intermittent energy supply patterns. However, seasonal balancing still is an enormous technical challenge ahead. An interesting option is coupling the power and heat sectors. Finally, the international solution builds on installing a large-scale super-grid that spans at least one continent. The scaling effects at this size promise to finally bring technical challenges down to a magnitude that could be met by moderate investments in already proven technology.
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