NOVEMBER 2011

SMART ENERGY EDITION

Future Power
Technology

A Smart
Energy Future
CAN INTELLIGENT TECHNOLOGY
REVOLUTIONISE THE GRID?

IN ASSOCIATION WITH

CONTENTS

November 2011

SIZING UP SMART GRIDS

Will the benefits make up for the high

initial costs of smartening up the grid?

Keeping
it Secure

Going digital opens up the energy

infrastructure to new risks - we
investigate the cyber threat

SIZING UP SMART GRIDS

Will the benefits make up for
the high initial cost?

PROOF OF CONCEPT

A groundbreaking experiment shows that

smart grids can already work

PROOF OF CONCEPT

TAKING CHARGE OF CYBERSECURITY

A groundbreaking trial shows

that smart grids already work

Going digital opens up the energy

infrastructure to new risks and threats

DISTRIBUTING THE LOAD

We find out how distributed generation can

help to make future grids more flexible

SMART STORAGE

DISTRIBUTING THE LOAD

How battery technology is evolving to cater

for the demands of smart grid storage

How distributed generation helps

make future grids more flexible

CONNECT TO THE FUTURE

We look at data communication options for

smart energy networks

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SIZING UP

SMART GRIDS

THE POTENTIAL OF SMART GRIDS HAS BEEN TOUTED NEARLY

EVERYWHERE AS A REALISTIC SOLUTION TO POWER GRID
STRAIN, BUT ADOPTION BY UTILITIES HAS NOT BEEN AS
WIDESPREAD AS ONE WOULD IMAGINE. MITCH BEEDIE
EXAMINES WHETHER THE BENEFITS FIT THE COSTS
MANY ELECTRICITY UTILITIES are piloting
smart grids, and suppliers are quick to stress the
benefits - particularly lower running costs from
automating meter reading and improved network
control. Communications companies, meanwhile,
say the technology is ready to implement.
The question is whether the benefits of smart
grids will be enough to repay the substantial
costs of rolling them out on a large scale.
Three reports focusing on the topic of smart grid
implementation illustrate some of the conflicting
opinions that currently prevail. The main issue,
it seems, is the implementation of a reliable and
pragmatic rollout schedule. Communications
infrastructure is also described in one report as
a major stumbling block, while another report
takes a step back and asks whether the promised
benefits will actually appear.

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A GROUNDBREAKING EXPERIMENT IN THE NETHERLANDS

HAS PROVIDED STRONG EVIDENTIAL SUPPORT FOR THE
SMART GRID CONCEPT APPLIED TO A NETWORK OF
DOMESTIC CONSUMERS, AS MODERN POWER SYSTEMS
EDITOR LEONARD SANFORD REPORTS

SUSTAINABLE ENERGY SYSTEMS of the future

will incorporate distributed and intermittent
energy resources and new patterns of energy
demand, for example the use of electric vehicles,
heat pumps for heating and smart appliances
that will run when renewable power peaks.
The supply chain will change completely, from a
classical top-down oriented structure to a fully
bi-directional system. Market roles will also
change; consumers will become suppliers and
new market parties will enter the supply chain.
Introducing smart technologies into the grid
to connect and match the energy generators
and consumers will require further advances in
information and communications technology.
To test these concepts in practice, the PowerMatching City project was set up in Groningen,
The Netherlands. The one-year trial involving 25
homes has demonstrated that it is possible to
create a smart grid with a corresponding market
model using existing technologies. This is the first
time in Europe that the results of a live smart grid
community are known at this technological scale.

PROOF
OF

CONCEPT

THE POWERMATCHING CITY SET-UP

PROVING THAT IT WORKS

Energy consulting and testing/certification firm

KEMA, together with the TNO institute, software
company HUMIQ and utility Essent, created a
living laboratory smart grid environment.

The trial achieved its primary goal, demonstrating

that it is possible to build a smart system using
readily available technologies. The project also
showed that it is technically feasible to allow
demand to track supply rather than the other way
around. Measurements indicated that the system
responds quickly to fluctuating demand and
maintains long-term comfort levels for the user.

The trial smart grid community comprises 25

household connected to each other through a
management system and equipped with micro
combined heat and power (CHP) systems with
high efficiency boilers, hybrid heat pumps, smart
meters, PV solar panels, electric transport and
smart household appliances. Additional power
is produced by a wind farm and a gas turbine
incorporated in the network.
The underlying coordinating mechanism is based
on PowerMatcher, a software tool that balances
energy demand with energy supply. PowerMatcher, developed by ECN, assigns a software
agent to every component on the system. The
agents then negotiate for the cheapest power,
sell generated power at the best price and try to
get the maximum benefit from each source of
power consumption.
Data is collected on how much energy the trial
participants use and on whether residents are
willing to exchange comfort for flexibility based
on financial incentives. It should also be possible
to analyse the scalability of the PowerMatcher
system in order to assess whether the technology
is capable of matching demand and supply from
numerous distributed resources in a large-scale
adoption scenario.

Practice also showed the necessity to design

appliances, including household appliances, in
such a way that they can decide for themselves
whether to switch on or off, depending on the
current electricity rate. Creating flexibility without
adversely affecting the end users comfort or
the systems energy efficiency turned out to be
possible, in this case by temporarily storing the
energy in a buffer tank in the form of heat.
The battery in an electric vehicle offers similar
potential, but any such structure requires a smart
optimisation algorithm, that is, a smart agent.
Use of the smart agent shows a key result that
end users buy their electricity at low rates and
sell it at high rates, regardless of the type of
appliance involved.
The principal organisers of the trial had three
main objectives energy optimisation for the
end user, reduction in the grid load for the
network operator and a reduction in distribution
imbalances for the utility. With all three objectives
considered as being achieved, the trial is set to
be expanded with a successor project.

TAKING CHARGE OF

CYBERSECURITY
SMART GRIDS TRULY represent the next frontier
of power distribution. Leveraging advances in
digital communications, this burgeoning
technology holds the potential to revolutionise
electricity distribution, metering, efficiency and
data monitoring at both local and national levels.
A number of pilot smart grid projects are already
up and running around the world. Following the
lead of the worlds first smart grid Telegestore,
established by Enel in Italy, other new projects
are now being set up in the US, Europe, South
Korea and elsewhere.
But as the concept picks up momentum and
seeps further into the public consciousness, a
significant concern has emerged: If we digitise
the electrical grid, are we not also exposing it to
the dangers of hacking and cyber terrorism?

SMART GRIDS HOLD THE POTENTIAL TO REVOLUTIONISE POWER

DISTRIBUTION, BUT GOING DIGITAL OPENS THE TRANSMISSION SYSTEM
UP TO NEW RISKS. CHRIS LO EXPLORES THE EMERGING CYBER
FRONTIER OF ENERGY INFRASTRUCTURE TO ASSESS THE THREAT
POSED BY HACKING AND OTHER CYBER ATTACKS

The Stuxnet attack on Iranian industrial control

systems (ICS) in 2010 showed the world just how
sophisticated cyber attacks have become, and
the possibility of a similar assault on such critical
infrastructure as the electrical grid has cast a dark
shadow over modern smart grid development.

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DISTRIBUTING
THE LOAD
LOCAL SMALL-SCALE POWER GENERATION, WHEN COMBINED
WITH SMART TECHNOLOGY, COULD MAKE THE GRID MORE
RELIABLE AND FLEXIBLE. ELISABETH FISCHER AND CHRIS LO
LOOK AT SOME OF THE DISTRIBUTED GENERATION PROJECTS
AIMING TO REDUCE THE DEPENDENCE ON CENTRALISED
POWER SOURCES

THE CONCEPT OF distributed generation (DG),

power generated from numerous small sources
for local distribution or to be fed back into the
main grid, certainly makes for an enticing picture.
In theory, the implementation of DG can reduce
communities reliance on centralised power
sources, increase grid reliability and make smallscale renewable power generation more viable.
In practice, current grid infrastructure could
struggle to keep up with the complex system of
give-and-take required to make DG work. But
the smart grid gradually inching closer from the
technological horizon could prove to be a key
facilitator for the integration of small-scale
generation. The worlds smart grid enabled future
is set to blur the lines between power generation
and distribution, with bulk power transmission
complemented by local generators in a complex
web of supply and demand.
Global investment in DG projects is certainly on
the rise, with Bloomberg New Energy Finance
announcing in early 2011 that the money pouring
into distributed generation had shot up by 91%
to almost $60bn in 2010, with the dominant
element being rooftop and other small-scale solar projects, notably in Germany but also in
the US, the Czech Republic, Italy and elsewhere.
Smart grids and distributed generation look to
be the ideal partners, as the development of each
technology will advance the cause of the other.
We round up some of the worlds most forwardthinking DG initiatives, from major pilot schemes
in the US and Australia to the US Armys trial of
microgrids for its bases in Afghanistan.

DISTRIBUTED GENERATION
OPENS UP THE POSSIBILITY
OF PRODUCING ELECTRICITY
LOCALLY FROM SMALL-SCALE
SOURCES AND SELLING THE
SURPLUS TO THE GRID

UTILITY-SCALE BATTERY use is looking at a

near-exponential increase over the next five years
as more intermittent renewable power sources
come on line. When renewables supply above
15% of grid power, they need backup storage or
the grid itself could become unstable.
Batteries have much lower running costs and
environmental impact than natural gas and
diesel-fuelled reserves. With pumped hydro and
compressed air energy storage only possible in a
few geographically suitable regions, there is still
no general alternative to batteries for storing tens
of MW. They will particularly be needed as smart
grids start to incorporate renewable supplies.
Deep-cycle batteries are already universal in offgrid residential and industrial renewable systems.
Even industrial systems are still only relatively
small scale, used for powering traffic signals,
video security, telecoms, radio communications
and pipeline monitoring or control. With serious
upscaling for utility use, banks of batteries can
now store power generated during low demand
and pass it on up to eight hours later during high
demand. This can give utilities better than fiveyear repayment times by reducing peak power
construction, transmission and distribution costs.
Grid storage so far has mainly come from leadacid batteries, but improvements in deep-cycling
performance will be needed for large-scale
renewable storage. There is increasing interest in
sodium sulphur batteries and, more recently, flow
batteries, but lead-carbon is the technology to
watch as it promises to solve the major problems
of lead-acid batteries.

SMART

STORAGE
BATTERIES ARE STILL THE ONLY REAL OPTION
WHEN IT COMES TO STORING ENERGY PRODUCED
BY SMART GRIDS. MITCH BEEDIE FINDS OUT
WHICH DIRECTION BATTERY TECHNOLOGY NEEDS
TO TAKE IN ORDER TO CATER FOR THE DEMANDS
OF SMART GRID STORAGE AS MORE INTERMITTENT
RENEWABLE SOURCES COME ON LINE

CONNECT FUTURE
to the

FOR SMART GRIDS TO BECOME A REALITY, ROBUST DATA

SYSTEMS ARE NEEDED THAT CAN TRANSMIT INFORMATION
TWO WAYS IN REAL-TIME. EUGEN MAYER OF POWER
PLUS COMMUNICATIONS LOOKS AT THE OPTIONS
FOR SMART COMMUNICATIONS NETWORKS

THE SMART METER is a primary enabler of the

smart grid model, transmitting and receiving
data on energy usage. This two-way exchange
of information means that consumers can play
a more active role, taking greater control of
their energy consumption, carbon emissions
and energy costs. At the same time, distribution
network operators take greater control of the
distribution network and realise operational
efficiencies with huge potential savings.

While the concept is simple, there are significant

hurdles when it comes to implementation. The
structure of the smart metering model is unclear,
and there is a need to standardise on a robust
communications network. Smart meters can only
function intelligently if they are supported by an
infrastructure delivering reliable bi-directional
transmission of consumption and control data in
real time. Broadband over powerlines (BPL) is one
of the technologies to do exactly that.

POWER-GEN INTERNATIONAL AND ITS CO-LOCATED EVEN NUCLEAR POWER

INTERNATIONAL RETURN TO LAS VEGAS, TAKING PLACE 13-15 DECEMBER AT
THE LAS VEGAS CONVENTION CENTER. CHAIRMAN DAVID WAGMAN ROUNDS
UP THE HIGHLIGHTS TO BE EXPECTED AT THIS YEARS EVENT

GEARING UP FOR

POWER-GEN
International

POWER-GEN International is the industry leader

in providing comprehensive coverage of trends,
technologies and issues facing the generation
sector. More than 1,200 companies from all
industry sectors exhibit each year and more than
19,000 attendees come together at POWER-GEN
International for a look at the industry with key
emphasis on new solutions and innovations.
New this year is the Financial Forum, which takes
place December 14 and 15. Focusing on finance
and development issues related to natural gas
and renewable energy, this separately ticketed
event held just off the main exhibition floor
includes two days of panel discussions and
seminars on the biggest trends in finance and
strategies. A Financial Forum highlight will be the
keynote luncheon address December 14 by Larry
Kellerman, CEO of Quantum Utility Generation,
who will address The New Project Debt: Equity
in Sheeps Clothing.
New also this year is a rapid-fire, 45-minute
interactive plenary session entitled State of
the Economy in 45 Minutes, to be held on 15
December. Panel members include Deanne Short,
regional chief economist with Caterpillar, Stephen
Brown, director of the Center for Business and

Economic Research at the University of Nevada,

Las Vegas and Gordon B. Pickering, director of
Energy at Navigant Consulting.
As in previous years, POWER-GEN International
and NUCLEAR POWER International delegates
will be able to attend the events annual Keynote
Sessions, to be held from 9:30am 11:30am in
the Barron Room at the Las Vegas Hilton adjacent
to the convention centre. Keynote speakers
include David M. Walsh, senior vice president of
Service & Manufacturing at Mitsubishi Power
Systems America, and Donald B. Karner, president
and CEO of ECOtality North America.
Through special arrangement with the Bureau
of Reclamation, attendees may choose from two
tours of the iconic Hoover Dam, which is a short
drive from the Las Vegas Strip on the Colorado
River. This engineering marvel not only enabled
the industrial development of the Pacific Southwest, but it also forms Lake Mead, the largest
man-made reservoir in the Western Hemisphere.
The tour on Sunday, 11 December takes place
from 1:00pm 5:00 pm. Another tour is set for
Monday, 12 December from 8:00 am 12:00 pm.
Space is limited and cut-off to register for both
tours is 18 November.

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Next Issue:

Optimisation & Efficiency

Improving the efficiency of power
plants is a major issue for utilities,
especially in coal and gas fuelled
generation. Next month we look at
upgrades and how the implementation
of new technology can help to boost
the performance of ageing plants.
Automation is taking the industry by
storm as new technologies emerge
to increase efficiency. We profile new
automation options, including the
latest web-based collaborative

asset management software, and look

at remote diagnostics to find out from
experts how plant performance
monitoring can help to detect errors
almost before they happen.
With the first large stationary gas
engine to incorporate two-stage turbocharging currently in trials, we find out
if the technology is likely to become a
common feature of large reciprocating
engines in years to come.

Future Power
Technology
Editorial

Duncan West Head of Editorial and Production

duncanwest@pmgoperations.com
Susanne Hauner Editor / Production Manager
susannehauner@pmgoperations.com
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