Chronicle: Better, Cheaper, Sustainable Power

The need for grid investments is overrated. The ongoing data revolution will reduce the need for capital expenditures.

By Jørgen Kildahl, Senior Advisor Energy Markets for Smart Innovation Norway / NCE Smart Energy Markets and former Non-Executive Director in Statkraft and E.ON, 10th of March 2017

140 BNOK is a rather staggering number. This is the scope of planned grid investments in Norway until 2025. In reality, however, investments can be far lower.

Investment estimates are based on historical data and on technology dominant until today. In practice, this means solutions which belong to the previous generation. Investment estimates pay little attention to the fact that we are well into the initial phase of a data revolution that will improve electricity grids and reduce the need to build them out.

A sustainable energy system involves the transition from fossil fuels to renewable energy sources. Recent years have seen the rapid development of production technology, communications and systems management. The proportion of renewable electricity generation, particularly from solar and wind, is rising steeply in many markets and production is often very little centralised.

The result is a more complex energy landscape, which today’s existing infrastructure cannot handle, either on the production or grid side. The challenges ahead relate to consumption management and production stops, numerous energy sources, energy storage, aging infrastructure, outdated IT systems, expensive maintenance and conservation regulations.

Today, power consumption fluctuations are regulated predominantly in production. In future, we must utilise the increasing flexibility on the consumption side. This cannot be accomplished with today’s energy IT systems. Everyone is now talking about artificial intelligence, big data and the internet of things. Few IT providers in the energy sector, however, offer specific system solutions from scratch based on the use of these new technologies.

New generation IT systems offer completely different possibilities. The greater complexity and scope of opportunity, the more naturally better they are. Complex energy systems are made for these new tools. Using artificial intelligence, advanced learning systems designed to handle large data volumes and extreme complexity have already been developed. These provide a completely different basis for decision-making, allowing for significant savings in operations, planning, as well as investments in electricity grids and production capacity.

The new generation of intelligent systems align and create a flexible power system in real time, in a whole universe of different energy sources and needs. The benefits of which include: improved consumption pattern forecasting, bottlenecks and technical condition, utilisation of existing infrastructure, dynamic adaption and optimisation through learning systems, digitisation of network information, component management and reduced costs stemming from power supply imbalances.

As an illustration, the Norwegian power grid is about 340 000 km long. Inspections must be carried out every ten years. Today, these inspections are performed manually or by helicopter to film and photograph installations. The images are then reviewed manually to check for faults and deficiencies.

By contrast, the use of advanced drones is a far safer and more efficient way to inspect and monitor the state of physical networks. This is why eleven Norwegian grid companies, which represent a substantial portion of the distribution system in Norway, are working on a joint drone project. The project has generated international attention due to its pioneering application of artificial intelligence and advanced sensors. Network faults and deficiencies are identified and communicated very quickly, reducing the time customers are without power due to extreme weather or other causes. At the same time, a drone solution offers huge potential savings for grid companies through reduced outage costs, in addition to intelligent, needs-based network maintenance rather than interval-based maintenance.

Development is occurring rapidly. Solutions are already available that enable far better utilisation of existing and future infrastructure. New players are driving the development. Through the EU’s Horizon 2020, NCE Smart Energy Markets in Halden, as well as the cluster in this environment, have developed ground-breaking and unique solutions.

To effectively realise these gains, it’s important that today’s regulatory regime be adapted and stimulated to adopt new solutions. Grid companies should have incentives to not only reduce operating costs but also capital expenditures. It’s now possible to embed all ambitions into planning through, for example, reducing the planned scope of investments by 30 percent.

This will not only contribute to far more cost-effective solutions and increased security of supply, it will simultaneously develop a sustainable energy system – a system that can replace fossil fuels with renewable energy.

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The chronicle was first published in Dagens Næringsliv Friday 10th of March 2017. Read it here:

Use of advanced drones is a much safer and more effective way of monitoring physical network condition. This is why eleven Norwegian grid companies, representing a substantial share of the Norwegian distribution system, are working on a joint drone project, writes the author. Photo: Øyvind ELVSBORG