Fossil fuels have served their purpose wholly since their discovery, providing energy that has surpassed initial expectations. Still, over the years, with more innovations springing up around the world due to technological development, it has become apparent that the source of our all-important energy and its continued use is detrimental to the environment we so desperately need for continued existence. So we have turned to renewable energy.
This form of energy has a less negative environmental impact, is more sustainable, allows for the creation of a much-needed increase in employment. RE sources also help sovereign nations utilise their natural environment and resources to generate the power they need and acquire a self-sustaining income.
This post is a case study of one of these sovereign nations at the forefront of renewable energy innovations; Switzerland.
Interesting Facts About Energy in Switzerland
Although Switzerland has seen a significant surge in renewable energies such as ambient heat, biomass, wind power and solar power since 2005, their main energy sources hinge on oil, natural gas, nuclear power and hydropower.
- 50.6% of Switzerland’s energy comes from petroleum and fuel sources, making them the main sources, electricity follows with a bit above half of that percentage with 25%, then gas with 13.5% and finally wood at 4.4%
- Hydropower plants are the primary sources of electricity, nuclear power generates about 33.5%, and thermal power plants (that do not use renewable energy) generate 2.3%
- Many Swiss citizens have strong opposition to nuclear power, and they have derailed several nuclear power plant projects. An example is the case of Canton of Aargau (Kaiseraugst) when in 1975, public protests led to the abandonment of a nuclear power plant project.
- Presently, Switzerland has set goals for an energy transition. In the Energy Strategy 2050, one of its most ambitious aims is to phase-out nuclear power use.
- 59.9% of Switzerland’s total domestic electricity production comes from its 638 hydroelectric power plants.
- The largest dam in Switzerland is The 285-metre-high Grande-Dixence dam (canton of Valais) is the third-highest gravity dam in the world and the largest dam in Switzerland.
- As of 2015, the per capita electricity consumption in Switzerland was 7,033 kWh putting it higher than the 2014 rate for France, which stood at 6,233 kWh, Germany at 6,225 kWh and the Netherlands at 6,108 kWh. However, it maintained a lower rate than Norway, which stayed at 21,091 kWh, Finland at 14,477 kWh, Sweden at 12,597 kWh, Belgium at 7,225kWh and Austria at 7,081 kWh.
(Source: Discover Switzerland)
Growth Of Switzerland’s Renewable Energy Policies
The Energy Strategy 2050 emphasises ‘increased energy savings (energy efficiency), the expansion of hydropower and new renewable energies, and, if necessary, on fossil-fuel-based electricity production.’
The system Kostendeckende Einspeisevergütung (KEV), which is the feed-in tariff (FIT) and its predecessor, the Mehrkostenfinanzierung (MKF), as well as specified targets, are the key instigators for market demand in renewable energy. Even though the budget made available has been rather limited compared to market demand.
The institutional framework in Switzerland, which supports renewable energy, has developed to grow continually without major hitches. With support from the SwissEnergy programme, this process has brought together myriad stakeholders, promoted innovative ideas, providing pertinent information, pushed market deployments and supported collaboration across different sectors.
As soon as KEV was introduced, an objective for sharing renewable energy within the national energy mix by 2030 was also introduced, providing a concrete signal for renewable energy sector investors. Within the Swiss Energy Act was included the target of an annual additional renewable electricity generation of 5400 gigawatt-hours (GWh) by 2030, of which 2000 GWh are to come via hydropower. These long-term targets build upon an important element in the overall framework for RES.
The government implemented a set of measures due to The Energy Efficiency and Renewable Action Plans of 2008 to improve renewable energy technologies’ market conditions. These measures included:
- Financial support for the replacement of existing heating systems with renewable energy, for example, heat pumps and biomass through global budgets distributed to the cantons dedicated to supporting measures
- Revision of the building standard for new buildings
Ongoing Renewable Energy Projects in Switzerland and Expert Projections
The world’s first high-altitude floating solar power plant is currently operating in the Swiss Alps. According to experts in the field, this technology could become a major part of the photovoltaic industry worldwide. Photovoltaic energy is produced by turning sunlight into electricity, and in 2013 Guillaume Fuchs got the idea to spearhead this high-altitude floating solar power plant in an alpine environment.
According to SwissInfo.ch, “The solar plant at Lac des Toules consists of 1,400 panels, laid on 36 floating structures made of aluminium and polyethene plastic anchored to the bottom of the lake. Current production exceeds 800,000 kilowatt-hours (kWh) per year, which is the equivalent of consumption for about 220 households”. Constructing a photovoltaic power plant in a human-made lake at very high altitudes means that the weather conditions are harsher and more intense with a thinner atmosphere and extreme UV rays. More electricity is generated thanks to the two-sided panels that capture the sun rays above and the reflected sun rays from the water’s surface.
Experts believe that floating photovoltaic stations such as this one are the future of solar energy because there is less need for unwarranted land use. There will also be a reduction in the competition between agriculturists, construction companies and the renewable energy sector regarding land. The water placement also leads to increased yield capabilities because it cools the panels as they sit effortlessly, extending their lifespan altogether.
Per year, nuclear power plants in Switzerland produce about 25 TWh of electricity. For the government to replace that amount of power, approximately 25,000 football fields would need to be covered with photovoltaic panels to cater to consumer needs, hence the need for more innovation.
We, at Hive Power, believe that the use of innovations plays a huge role in driving the renewable energy sector and technologies. Our Smart Grid Analytics solution offers industry participants the capacity to manage electric energy and electric grids, using data-driven AI-powered solutions, efficiently.
Let’s start with a defining statement for microgrid systems; they are self-sufficient energy systems that cater to energy needs for a small geographical area, they can have one or more kinds of energy sources such as solar panels, heat sources or wind turbines and even contain an energy storage solution, for example, batteries.
Their primary purpose is to produce sustainable power for an allocated area. These areas can be hospitals, campuses, business centres and small neighbourhoods. Microgrid systems are discussed in association with renewable energy, mainly because that is the type of energy being developed in recent years. They happen to do better than large scale grids that cater to larger populations from fossil fuel sources and are becoming increasingly accepted.
Microgrids work in an interconnected way, providing energy to buildings in the form of electricity, cooling and heating through software and digital control systems. Its major characteristics include:
- being local, which means it provides its services to nearby customers
- being independent, which means it can be disconnected from its central grid yet still function at 100%, this comes in handy in times of central outages and lastly
- being intelligent, which is a result of advanced software and management systems.
With the efficiency of microgrids, there is a pertinent need to measure their energy demand and supply, which is where Demand-Side Management comes in.
What is Demand-Side Management (DSM)?
Demand-Side Management can be explained as the “group of actions designed to efficiently manage a site’s energy consumption to cut costs incurred for the supply of electrical energy, from grid charges and general system charges, including taxes” according to Enel X. These actions are necessary for optimising energy use and saving costs on electricity charges by understanding the overall consumption costs, the amount of time this consumption occurs, and the supply and connection parameters.
Demand-Side Management is enshrined in the instability of grid systems around the world since renewable energy sources are highly penetrable including the decentralisation of their production, these cause innumerable disruptions on the microgrids and grid management services, a balance is therefore needed.
The demand and supply balance is a significant worry; the amount of energy created and fed into the grids has to match the consumption habits. Grid managers can now create energy management systems to offer grid services that are paid for, which in turn increase the costs for the electrical system.
In-depth on-site analysis has to be carried out on individual microgrid sites to properly engage in Demand-Side Management to ascertain the generation and consumption habits of customers.
All the measures used under Demand-Side Management are implemented on the generation side of the energy meter to modify consumption patterns and enable efficiency in using and managing energy loads. The measures don’t only involve energy efficiency but also something else called Demand Response (DR).
Demand Response is a technique that microgrid managers use to balance out sudden surges or plummets in consumers’ consumption of energy. DSM program participation, for now, can be voluntary or mandatory for consumers, for those that decide to volunteer, there are attractive incentives to encourage more participation. Some regulations have been introduced by most energy (electricity specifically) regulators that have encouraged the integration of Demand-Side Management at their facilities, an attempt at a level playing field for DSM.
What are the Advantages of DSM?
As referenced earlier, the major advantage of Demand-Side Management is saving and reducing unnecessary energy losses. These are the direct benefits. The indirect benefits include reducing the frequency of blackouts and the mitigation of emergencies that have to do with the energy systems.
To understand the advantages and disadvantages of DSM, it is imperative to compare it to other alternatives (Supply-Side Alternatives) such as energy generated via renewable energy, the power generated via fossil fuels, load shedding and peak power plants. It is imperative to note that Supply-Side Management deals with energy management on the other side of the meter regarding supply, the polar opposite of DSM.
|Energy via Renewable Sources||
|Energy via Fossil fuels||
|Peak Power Plants||
Advantages and disadvantages of DSM, in comparison to other alternatives. Source: Science direct
Here is a comparison of DSM’s advantages from the consumers’ perspective (customers and society) and power utilities. Source: Science Direct
|Reduced cost of operations||Energy bills are reduced due to energy-efficient equipment.||Greenhouse gasses reduction because fossil fuel power plant constructions aren’t needed|
|Reduced expenses on building power plants, costs of transmission and distribution||Power cuts are reduced, and the power supply is more reliable and stable.||Power distribution is equitable due to less disruption of power|
|Operations run efficiently||Customer satisfaction and reduced maintenance costs for energy-efficient appliances||The promotion and development of sustainable energy and efficiency in the conversion of renewable energy sources|
Demand-Side Management with Microgrids allows grid managers to observe how both systems perform in the transformation of conventional microgrids to those that run on renewable energy and how the Management of demand-side can help with the instability of renewable energy sources; how they can work with renewable energy storage systems and how they can be improved on for efficient utilisation and consumption by customers. Our Community Manager module is integrated with blockchain technology that can enable you to utilise DMS effectively and efficiently.
For a few decades, the idea of creating a faster, more decentralised web technology system which is less dependent on human interference has been a defining factor for database innovations, cue in the blockchain database, which is what cryptocurrencies are run on.
However, that is not the only use of this blockchain technology; renewable energy innovators know this. Implementing this new form of technology to execute contracts smartly to help manage energy needs seems to be the way forward.
The basic idea of the blockchain database technology is that data is introduced into a block with a specified intake capacity. Once that capacity is reached, data is rerouted to a new block that is continuously chained to the previous one. This is done chronologically so that whatever data comes in first is retained first.
The blockchain database is most commonly used to store information as a ledger of transactions for now, but many more aspects of this technology currently remain unexplored. Data entered into decentralised blockchains cannot be reversed, and so they can be view by anyone and are not controlled by any single entity.
Blockchain technology deals with the issues of security and trust in several ways. The major one is its almost impossible allowance for alteration without consensus due to hash codes’ chain reaction. Each block has created these hash codes, with the codes of the previous block and timestamps getting stored in the block following it continuously.
The ultimate goal is to create a database where digital information can be recorded and distributed without the possibility of this information being altered or edited yet remaining completely accessible.
How Does Smart Contract Work?
So far, understanding the blockchain technology has been simple enough, so will smart contracts.
These are contracts that can be digitally executed when predetermined terms and conditions are met. They are lines of code that have been previously embedded to carry out an agreed-upon command when triggered.
According to IBM blogs “The benefits of smart contracts are most apparent in business collaborations, in which they are typically used to enforce some type of agreement so that all participants can be certain of the outcome without an intermediary’s involvement.”
To wholly understand how smart contracts work here is an example. suppose you’ve ever gone through the hassle of buying a new home or getting a loan to start a business and have gotten easily turned off by all the hoops, checks and rechecks you have to be put through to get a nod from your service provider before the actual process begins. In that case, you’ll understand the stress of the situation which can drag on for months at a time, leaving you in more distress than when you started. Well, smart contracts cut out all that hassle. You can almost liken it to switching from a 1994 Macintosh to a 2021 smartwatch.
Entering and re-entering personal information, verifying identity, interacting with different intermediaries, and unnecessary fees and commissions at every step are entirely removed in smart contracts. So this means there are less third party interferences and much smoother executions of contract agreements where all parties are abreast of all details, changes and conclusions as they occur. A huge preference for companies and organisations alike.
How Can Blockchain Smart Contracts Improve The Energy Sector?
With energy evolving before our eyes from the era of fossil fuels and their effects on the earth to renewable energy sources and energy storage and management, it would be wise to seek out an innovative way of reducing the hassle of the management aspect with the blockchain technology and smart contracts.
Bridging the trust gap is a critical factor of smart contracts. If your information is already stored on the blockchain, it is readily available for review and decisions can be made about agreements, payments and deals within shorter periods.
Here are some key benefits of smart contracts:
- Trust: because Smart contracts work with preinstalled code they are executed once predetermined rules are adhered to without third party involvement and, transparency is evident, all information is shared with involved participants
- Security: blockchain technology works with code, all data is encrypted making it increasingly difficult for hackers to have a field day because all records are linked to previous and subsequent records with time stamps and hash codes making any alteration completely affect the whole database, to change anything would involve changing all the information on the blockchain
- Accuracy: without excessive human interference the execution of smart contract orders happens seamlessly and according to exact requests entered into the blockchain, so there is less of a possibility of human error
- Speed: information on the blockchain is automated saving you the stress of unending paperwork or manually correcting and filling documents every time a contract is needed, it does the job in half the time traditional contracts would take
- Immutability: in blockchain, more blocks can always be added but not removed, so records of every transaction are permanent, this increases trust between all participants
- Cost-saving: with the expulsion of unnecessary intermediaries less money will be needed to complete agreements or execute contracts, this will only happen when all other benefits are fulfilled and trusted
Smart contracts are executed through codes that follow the “if/when/then” statements stored on the blockchain database. In the energy sector accuracy, trust, security and saving cost is paramount, and these are the major advantages of smart contracts linked to the blockchain.
In contemporary energy management systems, which usually involve the generation of orders, trade compliance, managing orders, price delivery, exchange execution and settlement accounting, are all time-consuming. The lack of flexibility allows for too many complications tying in several intermediaries.
As a grid operator, smart contracts and decentralised software guaranteed by blockchain technologies can be utilised to create a seamless, secure and efficiently distributed energy system promising to solve at least 80% of these highlighted pitfalls.
Electricity is not only created when it’s needed but also stored on a large scale for easier distribution in response to its demands and supply, which is what necessitates grid energy storage. And with the advancement of renewable energy production around the world, the future of grid energy storage is slowly shifting from complete dependency on fossil fuels to throwing renewable energy sources (RES) into the mix, and ultimately only utilising RES in the production and distribution of energy for a cleaner environment.
According to Science Direct, “Energy storage is defined as the conversion of electrical energy from a power network into a form in which it can be stored until converted back to electrical energy”.
In essence, methods of energy storage work the same as the battery of your mobile phone. If you have to constantly keep your phone plugged in to use it, it will tend to put some restraints on its most basic uses, like being an actual “mobile phone” instead of becoming a “dormant phone”. That wasn’t the idea at first, was it?
Creating a battery pack that can be recharged at your convenience with the ability to hold the “electrical energy” needed to keep your mobile phone running while you go about your daily activities was a better answer to the dormant phone debacle, and now this idea is being innovatively recreated on a larger scale. Think, massive energy storage plants like silo farms, except for energy.
Importance of Grid Energy Storage
Yale Environment says that “experts believe widespread energy storage is key to expanding the reach of renewables and speeding the transition to a carbon-free power grid”. Over time batteries have been observed to be capable of storing and discharging energy exceeding periods that consistently become longer, making power capacity expand exponentially.
There is always a need to store excess energy for increased demand, and with renewable energy sources, the need is mostly tied to the uncontrollable variations in weather patterns.
For example, you can get solar energy during the day when the sun is out, but what happens at night when electrical energy is needed?
Or, in the situation where we can get the bulk of hydroelectric power from large water sources, but these sources are disturbed especially in rainy seasons?
The answer will turn out to be that energy that has already been produced will have to be pooled from elsewhere. Like mobile phone batteries just lying in wait for when needed, a wider variety of grid energy storage options are essential, so that there will be less dependency on the fluctuations or variations in weather or energy sources.
What are the Grid Energy Storage Options?
The electrical grids need a stable system that provides a balance between supply and distribution, many methods have been applied since the discovery of electricity to keep up with these demands so here are a few energy storage options that can be integrated into the grid systems that are worthy of note:
1. Tesla Powerwall/Powerpacks
These are lithium-ion batteries for home and grid use. According to Tesla “Powerpacks house, the world’s most sophisticated batteries with AC-connected energy storage system and everything needed to connect to a building or utility network. It dramatically simplifies installation, integration and future support, offering system-wide benefits that far outweigh those of standalone batteries.” It focuses on peak shaving, load shifting, emergency backup and demand response. A persuasive example is Hornsdale Power Reserve in Australia, where it was commissioned in 2017.
2. Redox flow batteries
These are a special kind of electrochemical battery cells that allow chemical energy provided by to chemical components that are dissolved in liquids that are pushed through the system on separate sides of a membrane to create stored energy. Essentially chemical energy is turned into electrical energy through reversible oxidation and reduction.
3. Flywheel energy storage
These can be found on wind farms such as that owned by the KEA electric cooperative in Alaska. This ETS harnesses the power of the wind to create and store energy. It works by accelerating a flywheel rotor to immense speeds of about 20,000 to 50,000 RPMs and keeping the energy in the system as rotational energy that can be extracted when needed.
4. Thermal energy storage
These are mainly used for heating and cooling applications. The idea behind this EST is to heat or cool a storage medium so that the energy stored within can be utilised when needed. The most popular of which is sensible heat storage which concentrates on storing thermal heat by raising the temperature of a solid or liquid, examples are gravel, ground or soil, pebbles and bricks. The Crescent Dunes solar energy project in Nevada is an example of this ETS that can store up to 1.1 GWh of energy which is equal to 10 hours of full power energy setting it apart from most of its predecessors.
5. Pumped-storage hydroelectric stations
These follow the process of electrically pumping water from a lower reservoir to an upper one where the hydroelectric station will then contain the water to create and store more energy. They are used during off-peak seasons to store water that can be used to generate energy when needed at peak seasons. An example is the Grand Maison Dam can power up within three minutes to feed up to 1.8GW of electricity into the French national electrical grid during peak demand.
6. Compressed air energy storage
This sees air becoming pressurised and stored underground until it’s needed, similarly to the process of hydroelectric energy conversion and storage. Excess electrical energy is stored as high-pressure air in large tanks or salt caverns and spaces. To revert it to electrical energy, the compressed air is pushed through a turbine. The Pacific Northwest National Laboratory and Bonneville Power Administration have undertaken a project to “evaluate the technical and economic feasibility of developing compressed air energy storage in the unique geologic setting of inland Washington”.
At Hive Power, we strongly believe that the future relies on the cohesive synergy of all these elements, technologies and innovations. Power generation, infrastructure, energy sources, and storage grids need to be designed to feed off each other producing stable and reliable energy sources for day to day use while also helping to reduce fossil fuel emissions. The future of Grid energy storage is smart, renewable and sustainable.
Since the cryptocurrency boom, blockchain technology has opened up innovations in various industries like healthcare, education, real estate, insurance, supply & logistics, asset management, music, and many other industries; other industries are catching on as well.
For this post, our emphasis is on electrical energy management. Many solution providers are constantly exploring the incredible possibilities of blockchain technology in the energy and utility sectors. Application of blockchain in the energy sector could be in grid management, automation, communication, billing, sales and marketing, metering and data transfer, mobility, and security.
For instance, Hive Manager is a smart-grid digital solution that uses blockchain technology to manage energy distribution within communities of renewable energy users. The energy distribution is decentralized, billing is automatic, and we achieve an optimum grid through such innovations of blockchain technology.
Challenges Of Blockchain Technology.
However, blockchain technology has its challenges, or trilemma, like we technically call it. The trilemma is based on three blockchain concepts, which are scalability, security, and decentralization. According to Vitalik Buterin, you cannot boost all three properties simultaneously; you would have to forfeit the other factor for you to maximize two.
Each of these factors has its extent of influence on different blockchain applications. However, in the energy sector, the scalability of blockchain technology is most important, mainly because managing a power grid involves an enormous quantity of data. Monitoring and controlling energy values, billing, intelligent response, and communication on the current blockchain platform cannot accommodate such amount of data within the time that’s required.
Let’s assume there’s a small city with 700,000 homes connected to a local grid. Each apartment has a smart meter that monitors the voltage, power, frequency, energy consumption, and billing in real-time. Such a network can generate a transaction rate of over one thousand units in one second. In a blockchain, the transaction rate is equivalent to the average number of blocks mined per second.
Now to something shocking, Bitcoin doesn’t process more than five transactions per second, averagely, and Ethereum is twenty transactions per second. Surprising, right? According to our assumption above, we needed a transaction rate of over 1000/s to effectively manage such a span of the grid network. How do we go about it?
Blockchain Technology and Energy Consumption
Something very noteworthy at this point is the quantity of computing power that it takes to mine blocks of notable cryptocurrencies like Bitcoin and Ethereum. These two blockchain entities use a peer-to-peer protocol called proof of work(PoW) to mine new blocks or cryptocurrencies by solving a cryptographic mathematical problem, so there’s a race between the peers in the network to resolve it first.
In other to have an upper-hand, you must have higher computing power. Higher computing power equals consuming more energy. No wonder mining of Ethereum was estimated to consume about 8.35 TeraWattHour annually; that’s the average amount of energy Honduras consumed last year.
Imagine that amount of energy consumed just for a mining rate of twenty transactions/blocks per second for Ethereum, and we are looking at a transaction rate of over 1000/s for a network energy users in a blockchain. This solution will lead to excessive energy consumption; therefore, it is not sustainable.
Blockchain’s scalability also has the hurdle of data storage. Each home would need enough storage to accommodate all the transaction history. Bitcoin’s transaction ledger was at 210 GB at the beginning of 2019, and it has an increment rate of 50 GB per year. Now imagine storing all energy data records of millions of homes within a grid, not to talk of the privacy restrictions that would be involved.
Researchers have recommended different improvements to make the scalability of blockchain possible. However, the most notable of these is the second-layer or off-chain solution.
What Does Second-layer Solution Mean?
Second-layer or state channel is a platform outside the blockchain that involves a peer-to-peer transaction between two agreeing parties and a third overseeing party that guarantees the value of the transaction.
Second-layer solutions are like payment channels with extensive transaction rates and lightning-fast processing abilities, but they are still connected to the blockchain. At the end of the transactions in the second layer, the system writes the value back to the main chain/blockchain.
Bitcoin, Ethereum and other blockchains have developed off-chain solutions that allow instant transactions between peers, such as;
For example, Lightning Network is estimated to have a transaction rate of 1,000,000/s while Raiden is considered to be infinite.
Pros And Cons Of Second-layer Solutions.
The off-chain solution has pushed the possibilities of scaling blockchains to a limitless boundary. What seemed impossible on the blockchain, we can carry out off-chain and transfer back to the blockchain after a transaction/contract.
Below is an overview of the benefits and limitations of the second-layer solutions.
|They have a high transaction rate.||You have to deposit a token to start, and your transactions are limited to that amount token you.|
|The transaction/mining fee is low compared to the main blockchain, and it is independent of the value transferred.||You can only transfer to one party per channel; however, you can have multiple channels.|
|Off-chain allows for secure and private payment.|
|Transactions are done instantly without involving the blockchain.|
|The overall capacity of the network sizes linearly with the number of actors on the network.|
Let’s narrow all these down to how they influence the energy sector.
How Second-layer Solutions Can Enable A Sustainable Blockchain For Energy
Second-layer solutions make it feasible to manage a grid network of considerable size without having to bother about the latency rate or throughput of the transactions. Typically, we can have millions of energy meters connected in a decentralized network and effectively manage the data processing.
Finally, the energy consumed from the numerous transactions done on the second-layer is insignificant relative to the energy that will be consumed by the blockchain for carrying out such amount of transaction.
In conclusion, blockchain technology has disrupted how we manage energy, as we’ve seen through this post. The off-chain transaction seems to be a viable solution for a scalable and sustainable blockchain; however, more research projects and collaborations will prove if this solution can be significantly improved, especially in its commercial value.
Take a careful look at the snapshot below; it is a typical representation of the settlement pattern in most developing countries. According to the source of this image, the darker shades represent a population density of over 1000 people per square km, down to less than ten people per square km as we move to the lighter shades.
In most instances, the utility systems in these regions were designed to cater to the significantly populated areas. While the remote villages, rural areas are left without electricity facilities.
As these countries develop, there’s now been the need to bridge the gap and provide energy facilities to those less privileged regions. Hence, one of the significant reasons why developing countries adopt microgrid solutions to solve the problem of rural electrification.
Through this article, we’ll take a wholesome look at the major reasons for the rise of microgrids in developing countries. We’d also examine some notable successes of microgrid program in these countries. Let’s dive in.
Why Are Microgrids Gaining Prevalence In Developing Countries?
We started to explain at the introduction: one of the most underlying factors leading to the need for microgrids in most developing countries – population settlement pattern. The rural centres and villages are far from the central grid. If there’ll be an endeavour to extend the network to the remote locations, it’s going to capital intensive and time-consuming.
Microgrids are cost-effective. Instead of investing a massive amount of money on buying transmission and distribution equipment to expand the grid to the remote locations, investing in microgrids will provide electricity to these places at lower costs.
Therefore, developing countries have taken a more economical step in adopting microgrids to provide electricity to their remote centres.
Most microgrid solutions are renewable energy-based: This is another factor that makes the microgrid solution appealing to the developing countries. In a bid to comply with the Paris Agreement and other sustainable climate pacts, microgrid programs are primary channels through which these countries promote clean energy policies.
Some of them provide incentives and remove taxes and dues on renewable energy equipment as a way to keep up to their climate change policies.
Microgrids provide reliable electricity: a common characteristic of the central grid in developing countries is unstable supply. This is due to several factors like shortage of fuel source (for non-renewable), inefficient grid system, over-demand of energy, and even political factors.
These untackled challenges in the developing countries give room for industries, private companies, and communities to create their microgrid solutions, both renewable and non-renewable.
All these factors and many more have favoured the widespread of microgrids among the developing nations. Statistics by the International Energy Agency predicts that there’ll be a tremendous increase in the development of microgrids; by 2040, about 80 million people will have access to electricity through microgrids.
Talking about microgrid projects, according to a report given by Navigant Research, by the second quarter of 2019, there were already 4,475 microgrid projects all over the world. These microgrids sum up to a whopping 27GW of total installed capacity. How much have the developing countries participated in the boom?
Case Studies: Three Notable Microgrid Programs Among Developing Countries
Though Northern America and Asia-pacific regions account for the higher share of the world’s microgrid capacity. The sub-Saharan Africa regions and Southeast Asia are developing their microgrid capacity at an impressive pace. Here are some notable ones that we’d love to appraise.
Indonesia is a country with 34 provinces dispersed over 70,000 islands, with half the population living in the rural regions. Before now, only 66 per cent of Indonesia used to have access to electricity; now, over 88 per cent of Indonesia is electrified. Thanks to programs like Bright Indonesia and other electrifying initiatives, more houses in the remote areas of Indonesia enjoy a stable electricity supply.
The goal of Bright Indonesia is to provide 1GW of electricity to over 12,000 villages where electrification is needed the most by 2019.
With an emphasis on the sub-Saharan region of Africa, Beyond the Grid is an initiative of the United States Government to make 30,000 MW of new and clean electricity available to over 60 million African households in remote and rural regions by 2030. The program has 40 partners all over the world who have committed to invest over $1 billion in providing renewable microgrid solutions for sub-Sahara Africa.
According to the latest report, the program has birth 56 power projects, which are already generating 3,481MW of power connected to 14.8 million homes and businesses across sub-Saharan Africa.
Launched in 2015 by Rockefeller Foundation, the program aimed to provide renewable microgrid solutions to at least 25 million Indians spread across six states. The foundation invested $20 million to achieve this electrification goal in five years.
In the latest report, Smart Power India had over 160 microgrid solutions spread in four Indian states – Bihar, Uttar Pradesh, Odisha, and Rajasthan. The microgrids were over 80 per cent solar-powered, and their power capacity ranged from 10kW to 70kW. More than 70,000 people in remote areas of India now have access to sustainable electricity.
For millions of lives, the microgrid is more than just a cliche. It is the hope of a household of five, who live in mountainous terrains, where power lines do not reach, to have access to reliable electricity. Yet, there are still hurdles to cross through this mission of making electricity accessible to these regions.
Prospects, Challenges, and Recommendations.
According to a United Nations publication, factors like tariff design, tariff collection mechanisms, maintenance and contractor performance, theft management, demand growth, load limits, and local training and institutionalization still need to be addressed.
A couple of solution providers are already tackling some of these challenges. For instance, we see the PAYGO scheme used in Kenya that allows energy users to make their payment using mobile money solutions. In the light of today’s technology advancement, there are simpler and more efficient systems that we can adapt to cater for these challenges.
As an expert in smart grid solutions, we firmly believe that these local energy communities can be improved by optimizing the microgrids using machine learning and blockchain technologies. The blockchain technology guarantees fair and efficient governance, while smart algorithms provide techno-economic optimization for their participants by lowering their bills and valorizing their assets.
Read our elaborate white paper on Hive Manager – an efficient microgrid management solution.
You may have heard of the Vehicle-to-Grid(V2G) business model for electric cars, but no one has convinced you of how viable and profitable it could be if done on a larger scale. Then stay-on to this blog-post, as we have the experts’ answers for you.
This article explores the practical business model for V2G. Primarily for a fleet manager, and how much benefits you can harness from such a model. We are aware that there are still many people sceptical about the success and profitability of the V2G business model; a careful read of this will resolve your doubts.
An Overview of What V2G Technology Involves
Vehicle-to-Grid is a bi-directional interaction between an electric vehicle and an energy distribution grid. With V2G, an electric car can send its stored energy to the network and vice versa when the vehicle’s battery pack needs to be charged.
For V2G to be possible, a connecting system that allows the bi-directional flow of energy and information must be present. One of the communication interfaces is called the ISO/IEC 15118 – “an international standard defining a vehicle to grid (V2G) communication interface for bi-directional charging/discharging of electric vehicles.” CharIN, a Berlin-based company, recently began the implementation of the ISO 15118 communication interface – also called Plug and Charge.
Another protocol that’s already in use is the CHAdeMO – a DC charging protocol for EVs; CHAdeMO Association, a Japanese-based company, develop it. Car manufacturers like Toyota, Mitsubishi, Nissan, Tesla, Kia, Mazda, Subaru, BD and Peugeot already have the CHAdeMO interface in place in some of their EVs.
It’s sufficient to say that a couple of EVs are ready for the V2G technology application; however, what are the benefits and who are the stakeholders?
A Business Case For V2G
As energy produced from renewable sources is increasing, there’s been a challenge of effectively distributing the energy we produce because renewable energy sources (RES) have their peculiarities. For instance, wind turbines and photovoltaic cells produce electricity when the wind blows, and the sun shines. Since these are not predictable, we must manage the energy produced effectively.
“Effectively” means that when the produced energy from a RES is not needed, the energy is stored; and when it’s needed, you supply it back into the grid. You can easily proffer a solution for building battery bank centres, but there are consequences of capital and profitability.
Instead of constructing battery banks, there are impressive batteries with substantial capacities already present in electric vehicles that we can harness. And fortunately, EVs now have a wider spread across the world, and we’ve predicted the spread to increase.
An important question that may pop-up is – won’t the car be in-use? Research shows that most cars are in use about 2-3 hours of the day. Most times, we park our vehicles. It’s possible to exploit this situation for V2G, especially if the EV owner follows a patterned charge-and-use cycle; which is why using V2G for a company fleet proves to be the most productive business model.
Therefore, this leaves us with a large pool of mobile battery capacity that the grid can adopt for temporary energy storage. Aside from storing energy, we can use V2G to regulate the grid’s frequency and also manage the energy demand response during peak and off-peak periods.
All these said, the adoption of V2G adds value to these stakeholders:
- Utilities: V2G services can help to store and manage energy produced from RES. It’s also an economical solution for ancillary services in a grid.
- DSOs can adopt V2G services as a demand balancing mechanism and load control within a local grid.
- The EV owner enjoys monetary perks and favourable charging conditions.
- The EV Fleet manager is the focus of the article and thus deserves that we discuss separately. A company fleet manager also falls under this category.
Indirectly, adopting V2G saves the environment by promoting renewable energy sources and avoiding the production of new Lithium-ion batteries(whose manufacturing process can be harmful to the environment.)
How Can an EV Fleet Manager Benefit From The V2G Business Model?
For an individual user, V2G offers minimal benefit in comparison with the amount of investment that you will need for running a full V2G service. However, a fleet manager with access to a significant number of EVs can add a new source of revenue by adopting V2G services for the EVs managed by his/her company.
An EV fleet manager can provide V2G business services for frequency control or for managing peak shaving.
Frequency Control V2G business Model:
Through active communication with the grid, the EVs in a fleet supply energy or draw energy from the grid in response to its current frequency value. This model also favours the life-span of the EV’s batteries as it involves a shallow charge/discharge cycle of the battery.
Managing Peak Shaving V2G business Model:
During peak periods, the EVs supply energy to the grid to meet the excessively high demand for electricity. While during the off-peak hours, you can charge up your EVs to their normal state. Unlike the frequency control model, this reduces the life-span of the vehicle’s battery.
The analysis below is an excerpt from Kaufmann, A. (2017). Vehicle-to-Grid Business Model–Entering the Swiss Energy Market (Doctoral dissertation, University of St. Gallen).
“Assuming a 10kW bidirectional charger, and an EV available for V2G services 12 hours a day on average. The revenue accumulated over one month is 10kW x (12hr x 30days) x 0.029CHF/kWh = 104 CHF as a capacity price only.”
According to the analysis, the revenue you can generate per month from one EV is approximately $105, which sums up to $1,260 per year. A fleet with 20 EVs can produce up to $25,200 annually. Fifty EVs will generate $63,000 annually – this’ just an example as V2G services can be dynamic.
To boost revenue generation, an EV fleet manager can decide to target EV users with a more organised movement pattern and charging sequence.
Operating a V2G business service as a fleet manager will require an active management system that allows you to optimise your processes and provide your fleet services more efficiently. Our Hive Manager solution is integrated with blockchain technology to enable you to control your EV fleet system locally effectively.
Solar power leads the way as the most popular form of renewable energy in the European Market. With a 36% increase in installations from 2017 to 2018, the adoption of solar technology is on the rise. This trend can be attributed to the drive to meet the EU 2020 targets.
EU 2020 Renewable Energy Directive
In 2009, the EU states set targets to generate at least 20% of their energy from renewable energy by 2020. In this move, the EU defined various support schemes for member countries to cooperate in achieving their targets.
The Cooperation Mechanism is one of the EU 2020 support schemes. It employs three approaches to help members meet the Renewable Energy targets. These include;
- Joint Projects
- Joint Support Schemes
- Statistical Transfers
- The Joint Projects mechanism allows two or more EU countries to co-fund a renewable energy project. They can then share the power generated.
- The Joint Support Scheme mechanism involves the development of schemes such as a common feed-in-tariff. The programme would promote the production of renewables in two or more EU countries.
- Statistical Transfers were designed to level the playing field. Naturally, renewable energy resources are not equally distributed across Europe. As such, member states can buy shares of a renewable project from a resource-rich country. The energy shares are deducted from the producing country and added to the supporting country’s energy portfolio.
These cooperation mechanisms are deployed on a macro level. They involve major policymakers, national energy regulation, transmission companies and energy producers. The concept of working together to meet renewable energy targets has trickled down to the community level. Here, Energy Communities have been formed to help regular citizens to own a share of a solar energy project.
Regulatory Victory for Energy Communities
Following the Paris Agreement, the EU began reviewing its energy policy framework. This framework would facilitate Europe’s transition to low-carbon clean energy. Between 2016 and 2019, the EU developed and refined the Clean Energy for all Europeans Package.
The Clean Energy Package contains specific elements that promote the rights of energy consumers. The new regulations support the generation, storage and sale of energy by individuals. They are especially beneficial for the growth of energy communities in Europe.
What is A Solar Energy Community?
Energy communities are societies that come together and pool resources for the co-ownership of solar energy projects. They can be made up of individuals, small businesses, companies, municipalities and cooperatives, among others. They allow average people to own a share of a solar energy plant.
People mainly join energy communities to reduce their utility bills. They are also interested in participating in the renewable energy revolution. As individuals, most energy community members face several limitations to build solar projects. These include lack of capital, space and property.
Many participants of energy communities live in rental homes. As such, they cannot install home solar panels or benefit from the incentives of solar affords homeowners.
How Do Energy Communities Work?
Energy communities can be structured in various ways depending on the region’s regulatory landscape. In some cases, the community members live near the project site. These members can consume the energy generated directly, which is the typical setup in off-grid locations characterized by mini-grids.
However, in most parts of Europe and North America, an extensive grid network is already established. Here, energy communities can finance new grid-connected solar power plants. Members then earn net metering or solar credits, and they can use these credits to reduce their monthly utility bills based on the amount of electricity generated and the member’s share in the energy community.
Solar is attractive for energy communities because it is a low-cost solution that is scalable and readily available. The communities calculate their solar credits through a Virtual Net Metering (VNM) system. The VNM enables you to earn Net Metering Credits from a solar energy system that you didn’t connect to. As long as your grid provider buys the energy generated by the solar plant, you can earn Net Metering Credits.
Are Energy Communities Good For Solar Projects?
Energy communities create an avenue for new players to participate in the transition to clean energy. The European housing statistics indicate that approximately 42% of Europeans lived in apartment blocks in 2017. Meaning that, regardless of financial capacity, almost half the population don’t own roofs to install rooftop solar projects.
Through energy communities, people who were conventionally left out can now acquire solar energy assets. Here are various ways in which the energy communities can lead to higher solar sales.
Faster Transition to Clean Energy
Unlike the conventional solar home system format, energy communities support a more active uptake of solar energy. Energy communities connect multiple customers per project. While the power generated may not be for direct self-consumption, each member of the community has a share in it.
As you approach utility-scale, solar energy community projects have the advantage of quick adoption. These systems acquire land rights and social acceptance much faster than typical utility-scale solar projects. This pattern is because most of the decision-makers in the community have a stake in the project. The energy community members are usually well informed about the project, allowing the developers to focus on the implementation of the project rather than gaining social acceptance.
Overcomes Grid Limitations
In remote or rural settings, the national grid may not reach every potential customer. The cost of grid expansion is also high. Also, the challenges of upgrading weak networks for demand-side management can limit the connectivity of new projects.
Energy communities can employ smart mini-grids to connect consumers. This step avoids straining the existing grid system. The mini-grids can also connect and feed solar power to the grid directly. High-quality mini-grids with adequate net metering infrastructure reduce losses and maximize the revenue for grid-connected solar projects.
Improved Energy Storage Management
It is challenging to ensure the uninterrupted supply of electricity on the national grid. Energy communities can facilitate Community Energy Storage (CES) solutions. Collective energy storage solutions are easier to manage and maintain than in individual homes.
Energy storage is a vital component of solar energy systems, and they reduce the load and reliance on the grid at night while community solar plants with integrated energy storage provide well-balanced uninterrupted power supply options.
Cost-Effective Solar Solutions
Energy communities enable more people to overcome the investment barriers involved with solar energy projects. The high initial investment costs are among the most significant obstacles to the integration of solar projects.
Energy communities allow members to share the cost of developing a solar project. This action lowers the entry cost for each individual and makes the project more attractive.
Development of Smart Grid Technology Markets
The new EU energy policy encourages the development of decentralized energy generation. In the past, independent power producers were either small individual homes or utility-scale solar projects. Energy communities create a demand for innovative smart technologies in the solar energy space.
Energy communities need dynamic digitized solutions to monitor their solar power systems. These solutions are necessary for data analysis, system optimization and report generation for the energy community members. Advanced analytical solutions are also required for net-metered systems that generate solar credits for the community’s shareholders.
The deployment of energy communities creates an opportunity for unmatched growth of solar energy in Europe. Enabling people who live in flats to participate and co-own solar projects almost doubles the potential solar investors in the EU. Integration of energy communities can accelerate the efficient development of solar projects across Europe.
After the liberalization of the energy market, the system has experienced some notable changes in electricity generation, creating competition in the originally conservative industry. This trend has allowed newcomers into the industry with new initiatives and innovations, thereby creating competition within the industry. The sector which was predominantly energized by coal gradually started shifting into a gas power plant.
A report from EnAppSys gave that gas-fired plant produced about 41% power more than coal to the European power supply in 2019 where coal initially produced 31% and 37% more than the gas-powered plant in 2018 and 2017 respectively. The reason for this rapid and massive shift cannot be too far from the need to reduce greenhouse emissions since the gas-fired plant produces less carbon dioxide than coal.
However, the gas-fired plant still produces more methane which is also a greenhouse gas. Hence, the policy eventually had to shift further towards renewable and environmentally friendly energy.
Several innovations continue to go into energy production to move the industry from fossil fuel towards cleaner energy, tackle global warming and to provide an essential contribution to the EU’s long-term strategy of achieving carbon neutrality by 2050. These innovations eventually encourage the new electricity market design in Europe.
Details of The New Europe Energy Policy
“Today’s approval of the new electricity market design will make energy markets more flexible and facilitate the integration of a greater share of renewable energy,” was the promises made by the Commissioner for Climate Action and Energy, Miguel Arias Cañete. He further went on to give the assurance of cost-effective energy supply, “An integrated EU energy market is the most cost-effective way to ensure secure and affordable supplies to all EU citizens.”
Of course, he is right, given that this new policy comes with a lot of promises that plans to increase the presence of renewable energy to about 32% in the EU’s energy mix by 2030. The policy intends to increase building performance which is known to consume about 40% of the total energy supply in Europe making it the single highest consumer and also improve energy efficiency to at least 32.5% by 2030.
Even the government was not left out as each member state was required to draft integrated national energy and climate plan known as NECP for 2021 to 2030 and where each draft are to be analyzed and necessary recommendations made to help them achieve the goal by 2030. This comprehensive update of the energy policy framework will facilitate the transition from fossil fuels towards cleaner energy and reduction in greenhouse gas emissions.
The electricity market design elements consist of four dossiers –
- a new electricity regulation,
- amending electricity directive,
- risk preparedness and
- a regulation outlining a stronger role for the Agency for the Cooperation of Energy Regulators (ACER).
The approval of the EU Council of Ministers’ puts it into law and enforces it.
An important point worth noting and worthy of commendation is the level of consistency the EU has moved. The various projections they have made and how they have followed through is worth commending regardless of whatever flaws might still be in this process. It will also come as no surprise when more players support this initiative soon.
What Are The Economic Implications?
The Energy Performance in Buildings Directive (EPBD) outlines specific measures for the building sector to tackle challenges of the large energy consumption, to update and to amend many provisions from the 2010 EPBD, which is eventually targeted at bringing energy consumption in buildings to a minimum of 32.5%. The changes will bring considerable benefits from a consumer standpoint as this excess money can be diverted into tackling other financial demands and eventually increasing their financial standing.
Also, from the government’s perspective, this will enable more energy to be distributed to where demand is higher. This new market will also attract more investors and will lead to the creation of jobs and encourage more growth in the economy.
Environmental impacts of the New Electric Market Design
This new electricity market is increasing the presence of renewable energy to at least 32% in the EU energy mix and this in the other way round will reduce the percentage of fossil fuels and the emission of greenhouse gases which includes methane and CO2. It was also noted that buildings contribute to about 36% of CO2 emission to the atmosphere.
Therefore reducing the consumption will also in like manner reduce CO2 emission. Most importantly, it will eventually contribute to the EU’s long-term strategy of achieving carbon neutrality by 2050. The brunt will be bared by countries that depend on the exportation of fossil fuel.
Another advantage of this new market is the increase in the availability and sufficiency of energy, and this is because the system cuts down energy wastage and increases energy efficiency. The policy will also make sure that the energy available is only used when needed, and in a way that does not distort the internal electricity market.
This new market has put the European Union as leaders and initiators in the fight for a green environment and lead initiators in the transition to renewable energy. With the various set dates for the step by step actions towards the complete eradication of carbon emission and complete transition to clean energy set by the European Union and member countries, it will be agreed that these have taken the bull by the horns and are sure to achieve this set-out goal.
Maybe this might have been fueled further by the fact that the EU is the biggest importer of fossil fuel and have everything to win and very little to lose with the transition to renewable energy. Whatever the case may be, global warming has eaten up our planet and becoming the biggest threat to our dear earth.
The effect of global warming is not restricted to Europe alone as this war is declared at every inch and bend of mother earth. Hence, it will only be rational for every individual, organization and Nation to enter this war and join the fight before it comes knocking at our door.