Making a smart energy grid work for India

Newspapers are showcasing the dramatically lower costs of solar power, reportedly cheaper than coal power now, and we are told that smart grids (and smart cities) are just around the corner. While enormous strides have been made in making these solutions both available and cheaper, we have to focus on the next challenge of electricity evolution to ensure that costs and benefits are both equitable and captured at a systems level. We should not push subsidies for the rich putting solar panels on their roof, nor should we end up with smart cities that are elite havens or expensive.

From traditional grid to future grid

The power grid is a complex marvel of engineering that has had a profound impact on society. One reason alternating current (AC) power grids are complex is because they are always balancing supply and demand in real time, continuously. Unlike the internet, one cannot “retransmit” or “slow down” during congestion. This traditional grid is now evolving to become smart, or rather smarter, driven by an intersection of digital technology and the use of renewable energy (RE). How we manage this transition will determine not just our supply mix of fuels but the fundamental nature of the grid and the relationships among its stakeholders.

No longer should we think of power flows as one-way, from generation to transmission to distribution to consumers. Consumers who set up their own solar panels can now become producers (“prosumers”), and they can also voluntarily adapt their loads— if given a signal or incentive. In the old days, demand was the main aspect that varied by consumers’ unilateral actions, such as by time of day or season, and the grid always needed sufficient generation capability to meet any anticipated demand (plus a margin). That’s expensive.

Now, with growing RE, even generation becomes unpredictable. The old way of handling this was to supplement RE with more generation capacity of a type which could be called into service rapidly. That’s even more expensive. Hydropower and open-cycle gas turbines usually fit the bill. Unfortunately, hydropower is difficult to build out, and we have limited gas available. A new solution is to ask consumers to reduce their demand during the peak demand hours. This isn’t just by having time of day (ToD) pricing but an actual market with dynamic pricing, termed “demand response”.

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