TODAY’S STUDY: THE CELTIC TIGER BUILDS A SMART GRID

Smart Grid Roadmap to 2050
January 2012 (Sustainable Energy Authority of Ireland)

Introduction

Ireland faces the same long term energy challenges as the rest of the world: a need to move towards competitively priced, environmentally sustainable, low carbon energy sources; and an insecure supply of conventional fossil fuels on which we are now dependent.

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A smart grid can help us address these challenges by maximising our use of indigenous low carbon renewable energy resources. A systems-based approach that optimises energy supply with demand for energy services and maximises our use of indigenous renewable electricity is central to ensuring Ireland meets its long term target of a secure and low carbon future.

While Ireland has plentiful wind and ocean energy resources that can produce low carbon electricity, they are variable in nature. Being an island nation with small amounts of interconnection to other electricity markets creates significant technical challenges to utilising these variable resources. However, if we can find ways of moving some of our electricity demand to periods when renewable supply is available, we will increase our ability to use our indigenous low carbon resource. This requires significantly increased information flow between producers, users, and system and infrastructure operators. The combination of systems, infrastructure, policies and technologies that enables a shift away from the traditional model of electricity supply following demand towards a model where demand follows the availability of low carbon, but variable, renewable supply can be collectively called the “smart grid”.

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Building on work done by the International Energy Agency, this roadmap explores how the smart gird can contribute towards increasing the amount of renewable energy on the electricity system, improving our energy supply security and meeting Ireland’s long term emissions reduction targets. It was developed in conjunction with a roadmap for wind energy and electric vehicle deployment in Ireland, and consistent assumptions are used across the three. The roadmap has been developed with input and advice from a wide range of stakeholders and experts in the smart grid arena. It identifies a number of key steps required to achieve a smart grid scenario resulting in 13.4 million tonnes of CO2 emission reduction by 2050. These include developing market structures and policies that encourage: increasing electrification of potentially flexible loads (residential and commercial space heating and cooling and water heating), demand side management, and deployment of technologies that provide greater system flexibility such as energy storage, distributed generation and load aggregators. This in turn will require equipment, control systems and communications networks to operate on harmonised protocols.

A number of key actions required are already in train. Communication systems between generation and networks and transmission system operators are already advanced and continuing to improve. The national smart meter rollout, scheduled to be completed by 2018, will enable real time monitoring of the system at the low voltage network level which will allow the participation in the market of distributed generation and virtual power plants. More importantly, it will allow electricity suppliers to offer pricing packages that provide customers with options and incentives to manage their electricity usage and costs. This increased level of customer participation is essential as it is this which creates the opportunity to shift electricity consumption to periods where variable renewable energy is available.

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Ireland is well positioned to lead in the deployment of the smart grid. The key energy sector actors are already engaged and looking to benefit from application of a smart grid. Many key ICT and energy equipment sector companies are looking to Ireland as a possible market in which to test smart grid products and concepts. Finally, Ireland has world leading research capacity in integrating large amounts of variable renewables into power systems. Now is the time to capitalise on this position, develop the expertise and technologies that will enable us to become world leaders, and develop an enterprise and innovation sector around smart infrastructure.

Finally, I want to thank the organisations, listed on the back cover, that participated in the steering group that supported the development of this roadmap.

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Key Findings

This roadmap explores how a smart grid can be operational in Ireland by 2050 and examines the contribution this will make to the decarbonisation of the electricity supply.

●● Decarbonisation of electricity in the Irish system will result in annual savings of over 13 million tonnes of CO2 by 2050. Eight million tonnes of this will be derived directly from the implementation of smart grid. A further five million tonnes will come from the displacement of fossil fuels due to the electrification of transport and thermal loads, facilitated by the smart grid

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●● Greater integration of indigenous renewable energy sources will see a net reduction in energy imports in excess of 4.3 Mtoe, [equating to savings of €3.2-7.2bn in direct fuel offset by 2050]

●● Increasing the electrification of thermal loads in the residential and services sector will see an annual demand in this sector in excess of 28,000 GWh by 2050

●● Electrification of transport, predominately in the domestic sector, will be expected to provide an annual demand close to 8,000 GWh by 2050

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●● Overall annual electrical final energy demand will be in excess of 48,000 GWh by 2050 with a corresponding peak demand of 9 GW. On-shore wind generation will be able to supply up to 33,000 GWh of the total demand

●● By 2025 Ireland will have 1.4 GW of interconnection. Our analysis indicates that a further 1.6 GW of interconnection will be required by 2040

●● More than 10,000 Irish jobs will be created by implementation of smart grid infrastructure and its associated technologies

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Matching demand to supply

By enabling demand response, load balancing, load shifting and reduction, the integration of electrical storage and the management of the import and export of electricity, the smart grid will enable large amounts of distributed generation and renewable wind electricity onto the system, thus improving security of supply. However, the asynchronous, variable nature of wind means that demand must be matched to meet supply. This will require strategies and mechanisms in place to shift, store or export excess generation in order to maximise the amount of total final energy that can be delivered from wind and other distributed generation sources.

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Smart Grid – the ambitious scenario

Predictions indicate that Ireland’s total wind resource could generate up to 140,000 GWh by 2050 (see SEAI Wind Roadmap). More than a third of this could be consumed domestically by aggressively increasing demand in the transport sector and built environment. By electrifying up to 50% of the transport fleet and over 90% of building thermal loads, the annual electrical demand could be increased to 80,000 GWh. This would enable over 50,000 GWh of variable wind generation to be accommodated on the system. When added to increases in generation from ocean energy and biomass, nearly 65,000 GWh of this demand could be met by renewable resources. This would represent an annual reduction in CO2 emissions of 25 million tonnes with a corresponding reduction in fuel exports of 8.5 Mtoe. In a medium price scenario where oil is at $179 / barrel this equates to savings of over €7.5 billion per year.