Future of Distributed Energy Resources and Renewables using 5G and Blockchain
INTRODUCTION
For the past couple of years, the use of renewables to generate electrical power has been on the rise. These include generating energy from sources such as solar panels (photovoltaic), hydroelectric plants and wind farms. Many countries worldwide are encouraging their citizens and utilities to increase the share of renewables in the energy mix, and regions such as the United States and Nordic countries are at the forefront. For instance, Sweden and Finland generate 54.5% and 41% of their required power from renewable sources, respectively. Denmark generates 30% of its electricity from wind, claiming to have the most reliable grid system in Europe. They have plans to increase the share of wind in the energy mix to 50% by 2025. The island of Hawaii is the first state in the U.S. to have an ambitious 100% sustainable energy goal. Apart from governments and utilities, it is becoming easier for consumers and communities to generate their own energy, say, by installing photovoltaic (PV) solar panels on their rooftops. Many people are also purchasing Electric Vehicles (EVs), and energy stored in EV charging batteries can be used to provide electricity to others during times of peak demand. This means that power generation sources are now numerous and decentralized, and we call them Distributed Energy Resources (DER).
As more and more consumers add their solar panels, they would like to sell the excess power to the utilities or share it with others in their community. Thus, there is a steady shift from people being mere consumers to ‘prosumers’, i.e., those customers who not only consume electricity generated by traditional fossil-fuel-based power plants, but also produce their own electricity. Traditionally, the power and information flow in the grid has been unidirectional — from the utility to the end consumer. For prosumers to sell their extra power to the grid, the flows need to be bidirectional. Mechanisms are required to integrate renewables and DERs into the main grid. According to the Intergovernmental Panel on Climate Change 2012, “the transition to a low-carbon future that employs high shares of RE may require considerable investment in new RE technologies and infrastructure, including more flexible electricity grids”. Smart meters can accurately measure the output generated by the renewables and report them back to the utility using communication networks.
NEW CHALLENGES POSED BY INTEGRATING DERs AND SMART GRIDS
It is not so easy to overhaul decades-old traditional grid infrastructure to accommodate DERs. Integrating DERs into the main grid opens up the following challenges which need to be addressed:
1. Variability: The nature of renewables is such that the output produced by them is variable. For example, there are periods of abundant sunshine followed by periods when the clouds cover the sun. Winds blow intermittently.
2. Distributed generation: These are privately owned and operated small scale power generation systems, such as rooftop solar panels operated by a community. Due to their variable nature, utilities are concerned about their effects on grid stability and reliability. Utilities need to overcome these apprehensions.
3. High initial cost — Compared to traditional power plants, setting up renewable generation sources entails higher initial cost; however, later operating costs are expected to be lower.
4. Pricing and value — Who will determine the per kWh price of consumer-generated electric power? How will the output be measured accurately in the first place?
Typically, grids operate to ensure that electricity demand equals its supply at all times, owing to the difficulty in storing power. Because power generated by fossil fuels is not variable, traditional grid mechanisms easily ensure the demand-supply equilibrium. However, wind and solar are variable, which smart grids can handle. For instance, if the output from a PV panel suddenly drops due to clouds blocking sunshine, millisecond-level precise load control and distribution automation technologies can temporarily interrupt services to interruptible loads of industrial consumers. Faults can be quickly detected, and that area can be isolated to ensure that other areas are not affected. Advanced metering infrastructure and smart meters can accurately measure the output of renewable sources and transmit them in real-time to the utility, who can then price it accurately.
DERs such as power stored in EV charging batteries can also serve as secondary power sources, which can be used in times of shortfall. At times of peak demand, if the voltage on the feeder lines in one section of the distribution grid drops dramatically, the shortfall can be met by drawing power from DERs, avoiding the possibility of prolonged power outages. Thus, integrating renewables and DERs in the main grid will strengthen people’s perceptions towards utilities.
MICROGRIDS
No discussion on DERs can be complete without mentioning microgrids. You can consider microgrids as a form of DER that can operate autonomously from the main grid. Although multiple microgrids are usually a part of the main grid and the energy generated within it contributes to the total energy output, at certain times, they can disconnect from the main grid and continue to supply power to their users by producing energy internally. The power sources are mostly renewable energy-based, such as rooftop solar panels. Microgrids are typically the size of an industrial or university campus, a small town or a neighbourhood. Consider this: when Hurricane Sandy hit New York City in October 2012, most of the downtown area below the 34th street in Manhattan was blacked out because of the devastation caused to the centralized grid, except for a small area in and around Washington Square Park, where New York University and some surrounding buildings were part of a common decentralized microgrid. Thus, when communities and neighbourhoods operate microgrids powered by renewables, they can be self-sufficient at times like these.
When the microgrids operate independently of the central grid, we call it ‘islanding’. By incorporating renewables into the microgrid, the area served by the microgrid can continue to operate in events of hurricanes and power outages, increasing grid reliability for those users. This type of arrangement is beneficial for remote areas and island nations (remember the Hawaii example in section 1?) where it is operationally and economically infeasible for utilities to lay out transmission lines and towers, or to connect their grids with larger grids of mainland areas and other countries. Microgrids are also beneficial for certain establishments such as hospitals and military bases, where continuous power supply is crucial. (Imagine that during a critical surgery on which a patient’s life depends, the power goes off. That is certainly not acceptable, is it?)
ROLE OF 5G IN INTEGRATING DERs IN A SMART GRID
The communication architecture of traditional power grids consists of self-built fiber rings, wired and wireless private lines and WiFi networks, which are primarily used for power plant and substation communications. Certain problems are inherent in using such infrastructure. Laying fiber rings and wired lines is costly because it requires setting up expensive terminals. The O&M costs associated with these are high. While WiFi networks are relatively inexpensive, they are prone to interference and cyberattacks. Although many utilities are shifting to employing 4G networks in their grid, 4G’s bandwidth and latency capacity are insufficient to support certain use cases related to renewables and DERs.
5G — the fifth generation of mobile communication networks, promises to deliver much higher speeds and much lower latencies than 4G networks. The advantages that 5G brings are as shown in figure 1:
Following are the application areas in DERs and renewables where 5G is required:
1. Due to renewable sources’ variable nature of power generation and consumption, millisecond-level precise load control is required to balance generation and consumption in the future. 5G’s Ultra-Reliable Low Latency Communication (uRLLC) feature ensures end-to-end reliability in milliseconds, enabling quicker and accurate grid balancing. uRLLC will also be used for automating power flow switching, load management and voltage stabilization.
2. Managing the complete gamut of decentralized and distributed energy resources requires utilities of the future to set up specialized platforms for their management. These platforms will consist of a huge number of IoT sensors, measurement devices and smart meters, which will continuously collect and exchange information every millisecond to monitor the state of renewable power generation. According to Frank Thies, Executive Director at SmartEn, by 2040, 1 billion households and 11 billion connected devices will participate in power systems. The massive amount of data generated by hundreds of millions of devices needs to be relayed to the utility, necessitating the upgrade to bidirectional communication. 5G’s Massive Machine Type Communications (mMTC) capabilities are required to handle devices at such a massive scale. 5G mMTC implies that as many as one million devices can be connected within one sq. km, about 10–100 times 4G’s capacity.
3. An emerging paradigm in telecommunication technologies is that of ‘network slicing’, which means that a telecom operator can partition the network into mutually exclusive partitions called ‘slices’, all sitting on the same physical network resources. Each slice can be configured to have specific Quality of Service (QoS) parameters depending on the end user’s requirement. Network slicing ensures that the desired QoS parameters are always met, due to separation of virtual resources. So, you can have a uRLLC network slice to support mission-critical operations such as autonomous vehicle driving and a separate mMTC slice to support massive communication between sensors and cameras on the roads for real-time traffic management. And all of this built on the same physical network! The adoption of 5G networks worldwide is expected to accelerate the application of network slicing. So, how can network slicing be used for managing DERs and renewables? As mentioned earlier, monitoring renewables requires uRLLC and mMTC capabilities of 5G. DER power management entails transmitting massive sensor data in the uplink and second- or millisecond-level precise control in the downlink. So, there can be a dedicated network slice for DER management with mMTC in the uplink and uRLLC in the downlink.
4. Digital Twin for DER integration: Another exciting and upcoming technology is the ‘digital twin’. A digital twin is a virtual representation of a plant, process, person or system that serves as the digital counterpart of the physical object. Digital twins are helpful in collecting data from IoT devices and using them to run simulations on the virtual representation before applying them to the actual systems. With 5G-enabled digital twins, utilities can create a virtual model of plants having renewables, DERs and microgrids integrated into them. They can run simulations of renewable energy generation, interruptions (simulating ‘variability’), and consumption to tune grid balancing operations before applying the learnings to real-world energy systems.
5. Smart inspection of DER-integrated grids: UAVs, drones and robots can be used to inspect renewable power generators, transmission lines and other terminals. UAVs and drones are beneficial when transmission lines pass through remote areas such as forests and deserts, where it is difficult for human operators to travel to perform the inspection physically. The UAVs and sensors (temperature, humidity, corrosion detection) will capture massive amounts of data and video feeds, which must be transmitted to the central control in real-time. 5G’s Enhanced Mobile Broadband (eMBB) capabilities, which ensure Gbps-level speeds will be used to support these applications.
Case study: 5G+ Smart PV plant in China:
In January 2019, China Mobile worked with State Power Investment Corporation to build China’s first 5G smart photovoltaic (PV) power plant in Jiangxi Province. 5G was used to control UAVs and robots to conduct power plant inspections and relay the feeds to the central control centre in Nanchang. On-site personnel used smart wearable devices to connect with remote experts, who guided the personnel to do specific grid-related operations.
Case study: Use of 5G to integrate more renewable energy (ABB + UK Power Networks)
ABB, the Swedish-Swiss company which is a leader in grid automation, has partnered with UK Power networks to enable the latter to accommodate growing renewable energy. The UK wants to increase the country’s share of renewable energy to 80%. To achieve this, ABB has installed a software-based wide area protection system based on 5G networks that are used to achieve communication between substations. DERs such as solar and wind farms are monitored in real-time through a countrywide network of thousands of substations. It is estimated that this system has the potential to unlock 1.4 GW of power that will enable further integration of DER. This would save 19 million tonnes of CO2 emissions annually and achieve cost efficiencies of as much as £750 million for the country’s DNOs.
BLOCKCHAIN FOR RENEWABLE ENERGY TRADING
In October 2015, prime minister Narendra Modi announced an ambitious goal for India: to install 175 GW of renewable capacity by 2022. The United Nations aims to achieve ‘net zero’ carbon emissions by 2050. To address such lofty goals, it is essential to bring the source of energy generation as close as possible to the source of energy consumption. This is the idea behind microgrids and DERs that we discussed in the previous sections. In essence, it is required that the governments decentralize the grid, pushing energy generation and sharing to the town and village levels, achieving what is known as ‘energy democracy’. In the future, communities, neighbourhoods and villages will be encouraged to take charge of their energy requirements, say, by having people living in an area combine their rooftop solar panels to form a microgrid serving that area. People can get into energy sharing engagements with each other, apart from selling excess energy to the grid. There are several advantages to such an arrangement. Not only are decentralized, community-operated grids more resilient (recall the Hurricane Sandy example in section 3), generating energy close to the consumption source will mean fewer power losses in long-distance transmission and distribution. Decentralized grids are less vulnerable to cyberattacks because, as opposed to a traditional grid with a centralized command centre, decentralized grids do not have a single point of failure (SPOF).
But this kind of shared power-sharing arrangement raises the critical question of organizational structure. Who is going to decide who will get how much amount of energy? Who will manage the transactions and billing? Who is going to keep track of everyone’s energy generation and smart meters? How will energy transactions among neighbours be accomplished? How can it be made sure that neighbours are reliable, and that they are not tampering with their (or, worse, others!) meters? People cannot blindly trust others on these matters. A reliable and trusted third party (TTP) mechanism must ensure trust among the decentralized participants.
This is where decentralized trust solutions such as blockchain come into the picture. Members of a community can come together and create an energy blockchain. Energy transactions, the amount of power generated by an individual, receipts, etc., can be stored on an immutable blockchain to ensure transparency in the process to everyone. The blockchain can regulate the sharing of power among users by keeping track of everyone’s smart meters and logging the data onto the distributed ledger. The blockchain can be public or private. Further, multiple blockchains can also be combined into one master ledger (although that seems difficult to achieve in the foreseeable future) to take care of everyone’s energy needs in a wider geographical area. Small-scale energy transactions among neighbours, called ‘microtransactions’, can be settled by introducing a special energy token whose value is pegged to the amount of kilowatt-hours. Because information about the tokens value is available every time, and the tokens are subject to the same market-pricing dynamics as when users get their electricity from utilities, users can fine-tune their energy usage during the day. For example, people can choose to charge their EVs or run their washing machine when power is relatively cheap.
Case study: LO3 energy
Founded in 2015 in Portland, Oregon, LO3 energy develops blockchain based solutions to create a marketplace for small producers of energy to sell their excess energy to other parties (other consumers or utilities), enabling broader community participation and helping reshape the future of energy. Their blockchain-based trading platform called Pando offers multiple applications built on top of the platform. These applications include flexible trading of energy attributes, performing analytics and energy & data management. In 2019, LO3 energy teamed up with Green Mountain Power, one of America’s recognized energy providers, to deploy the country’s first local marketplace for energy providers and consumers. A mobile application connects local businesses such as ski resorts, craft breweries and dairy farms equipped with solar panels to sell excess energy and earn extra income.
Blockchains also allow the creation of smart contracts. Smart contracts are agreements among the transacting parties, whose terms are executed when certain conditions are met. So, the blockchain can allow a user access to a specified amount of prepaid electricity based on whether the payment in energy token has been made or not. Because blockchains are free from the inefficiencies that plague traditional power grids, more and more people can join onto the network by adding revenue-generating solar panels, allowing the decentralized grid’s capacity to grow organically. All of this means that the entire system can operate without some centralized authority dictating who gets how much power and at what price, and that is really the beauty of blockchain.
Among all the communities, the ones that stand most to benefit from a blockchain-based smart grid are remote areas, villages, communities with indigenous people (such as the aboriginals of Australia) and the like. These communities seek energy independence, or the demand from such regions is insufficient to encourage a utility to install transmission lines and towers. Blockchains for remote and indigenous communities can solve these issues by allowing community members to be self-sufficient in their energy needs. However, it is not exactly cheap to develop blockchain-based microgrids. This is where governments at the state, local and panchayat level can play a role, say, by subsidizing the installation of solar panels in the village and taking initiatives to build an energy blockchain.
Overall, 5G and blockchain will play a crucial role in the coming years in enabling community participation in the grid and integrating DERs and renewables in a seamless, transparent way.
REFERENCES
1. ‘Smart Grids and Renewables: A Guide for Effective Deployment’, published by International Renewable Energy Agency (IRENA) in 2013
2. ‘5G Network Slicing Enabling the Smart Grid’ — China Telecom, State Grid and Huawei
3. ‘5G Application Scenarios White Paper’, China Mobile, November 2019
4. https://www.voltimum.co.uk/articles/abb-technology-enables-uk-grid-integrate
5. ‘The Truth Machine: Blockchain and the Future of Everything’ by Michael Casey and Paul Vigna (Book)
6. LO3 energy official website: https://lo3energy.com/
