Cities represent three quarters of energy consumption and 80 percent of CO2 emissions worldwide. Today, half of the world’s population lives in a city and this is expected to increase to three quarters by 2050.
The increased growth in urbanisation is putting a strain on our energy, transportation, water, buildings and public spaces, so solutions need to be found which are ‘smart’, i.e. both highly efficient and sustainable on the one hand, as well as generating economic prosperity and social wellbeing on the other.
Energy systems in developed economies are facing increasing maintenance and upgrade costs to keep up with demand and ageing infrastructure, whilst those in developing countries are racing to keep up with exploding energy demand. These factors drive the need to improve energy management to increase energy efficiency and resilience. Estimates forecast the Smart Grid technologies market to be between US$150 billion - US$200 billion by 2020. Offering secure, affordable and sustainable energy is vital to enable citizens and businesses to achieve economic growth. In the UK for example, chancellor George Osborne and Mayor of London Boris Johnson have already backed more than £1 trillion of planned spending to upgrade the infrastructures of London and the “Northern Powerhouses” of Leeds, Liverpool, Manchester, Newcastle and Sheffield.
Energy storage is one Smart Grid solution that will play a major role in supporting our future energy needs. From a low carbon perspective, storage is vital to solving the problem of renewable intermittency by absorbing surplus power and releasing it when needed. This function simultaneously helps the grid to securely balance capacity and supply and protects the grid from “stress events” (e.g. power outages) on the grid. Furthermore, the introduction of energy storage in substations can decrease the need and cost of traditional reinforcement, such as transformers and cabling. For example, Europe’s largest battery storage project, a 6MW/10MWh battery system currently being installed by S&C, is expected to save UK Power Networks, one of Britain’s Distribution Network Operators (DNOs), which serves around 8 million customers, approximately £6 million (US$9.4 million) over 15 years over traditional reinforcement methods. The technology is proven and we are now trialing the financial viability of the project, which could be replicated across all UK network operators, conservatively saving more than £700 million by 2040 compared to business-as-usual approaches.
We also work with Advanced Distribution Automation (ADA) which is a lesser known Smart Grid technology but plays an important role in increasing resilience; by detecting power outages (e.g. caused by storms) and using smart switches to “cordon off” affected areas to minimise disruption to the rest of the network. In the US for example, Tennessee Electric Power Board (EPB), which serves 170,000 customers, was losing around US$100 million annually due to power outage costs. Using S&C self-healing ADA technology, as of June 2013, EPB achieved a 60 percent reduction (45 million minutes) in outage duration since 2011. The following year, when a major storm caused severe damages to grid infrastructure, EPB had a 55 percent reduction in duration of outages, saving EPB US$1.4 million in operational cost savings in a single event.
As the entire grid gets smarter, we can expect there to be more cases of these technologies working together to harmonise power flow, voltage, system stability and system balancing. What’s vital is at each stage of its modernisation, the grid is mapped in a detailed way to allow for the integration of current technology, as well as for future developments. Smart technologies alone cannot achieve systemic change, projects need to be supported by changes to the way the market operates. The difficulty for smart grid technologies like storage are that rules were made for the past and in many cases, are now out of date.
If smart cities around the world are to be successful, we must move away from the historic cross-sector approach. Traditionally our resources have been considered by verticals: energy, water, waste, transport and health have been considered and managed separately. If we are to have more connected thinking, decision makers need to move away from the conventional model. This transition will increase efficiency, and yield additional opportunities for our cities, citizens and industries.