Dream Big: Utility Efficiency In The Future
Energy efficiency is a win-win solution as it reduces cost of energy generation, controls demand thereby cutting down CO2 emissions and enhancing grid reliability. In addition to these, energy efficiency also reduces investments in transmission and distribution (T&D) infrastructure, improves energy security and most importantly reduces dependence on scarce resources.
Energy wastage in an electrical system is the difference between the primary energy input and the energy output at the consumption meters. The greatest energy losses happen at the generation end, in the range of 25-50%. Network losses contribute to another 3 to 12%. Therefore, utilities should deploy efficient equipment in their networks such as low-loss transformers, actively manage power dissipation in their grid by dynamically reconfiguring it, thanks to sensors, software such as ADMS and analytics that constantly calculate the shortest and least resistant path to the flow of electrons.
However, it is noted that these measures will eventually result in a drop in the sales and will have an impact on the revenue generation and profitability of the utility companies. In such a scenario, utilities need to search for new sources of revenue to grow their business. Because increasing prices to maintain revenue seems difficult, they should foster electrification of usages to compensate for this drop (e.g. heat pumps, electric vehicles).
With the increased proliferation of smart appliances, buildings and cities, both demand for energy as well as the demand for energy efficiency will grow manifold. As a corollary, the need for utility efficiency will be real.
The significance of energy efficiency is being recognised by all and sundry. Governments from 106 countries are putting in concerted efforts and deploying new initiatives in order to make sustainable energy a reality through Sustainable Energy for All, a global initiative led by the UN Secretary-General and the President of the World Bank. One of the key objective is to double the global rate of improvement in energy efficiency by 2030.
Apart from energy efficiency, there are two more types of efficiencies utilities should improve: capital expenditure (CapEx) efficiency and operational expense (OpEx) efficiency.
Utilities can achieve CapEx efficiency by identifying areas where they can invest in new hardware and in digital solutions – which can include incorporation of smart equipment, redesigning existing assets to entrench intelligence and automation, or investing in new technology, such as storage or demand-side management that will lower or even completely negate the need for physical infrastructure altogether.
Right sizing equipment (e.g., transformers and switchgear) and networks (e.g., fewer lines, cables, and trenches) implies less grey energy, the energy embedded in their manufacturing and installation.
OpEx efficiency: The utility industry is often accused of having high degrees of inefficiency which further drives up operational costs. In order to control these costs from spiralling high, it is imperative for utilities to control energy-consuming operations and monitor performance as energy losses means wastage of energy, which in turn, incurs heavy losses. Operational costs can be hugely reduced by planning, measuring and improving T&D efficiency.
The OpEx strategy must also consider the migration from centralized plants to more local generation, as well as manage the shift toward modern condition-based maintenance strategies, which allows equipment to be configured and operated near to its physical capacity. Popularly referred to as asset sweating, this enables DSOs to get the most out of their existing infrastructure and concede equipment purchases, all while providing the same service standard to customers.
The potential for ensuring efficiency in electrical utilities can be unveiled by implementing efficiency-enabling technologies. The future lies in using utilities with sensors and actuators dispersed across the field, amalgamated with analytics that give a much better understanding of energy flows and supply-demand balancing. Efficiency is what will make electric utilities stay relevant.
In such a scenario, Schneider Electric’s EcoStruxure™ Grid is set to play a critical role in Grid transformation. EcoStruxure helps as an open, interoperable, IoT-enabled system architecture targeted at several verticals, including the Grid market and DSOs (Distribution System Operators).
These connected technologies also allow new predictive models, where monitoring allows weakened assets to be discovered and proactively replaced, saving hundreds of hours and tens of thousands of euros or dollars per year by avoiding failures or unplanned (thus expensive) emergency servicing.
It’s clear that as the smart grid era advances, the integration of IT and OT, and the Internet of Things, will be critical to the development of efficient asset management programmes.
