Digitalization as transformer: Creating a truly ‘smart grid’

Digital innovation could create massive efficiencies by blurring the lines between supply and demand, says IEA

You might say that proponents of energy digitalization have a rather sharp focus on blurring the lines.

In a recent report, Digitalization and Energy 2017, the International Energy Agency (IEA) looked at the new digital age, and its potential to make energy systems around the world more connected, intelligent, reliable, efficient and sustainable.

And digitalization stands to make some of the biggest gains in the electricity sector, through the grid itself—by breaking down the distinctions between supply and demand, between generation and consumption.

By turning the electricity system into a true “smart grid,” digitalization creates multiple opportunities in the area of efficiency:

• Smart demand response. By altering the times at which households draw electricity from the grid, this tactic could provide 185 gigawatts (GW) of system flexibility and save hundreds of billions of dollars in new electricity infrastructure.
• Integration of variable renewables. Digitalization can enable grids to better match energy demand to times when renewable energy systems are producing—i.e. when the wind is blowing, and the sun is shining.
• Smart charging EV technologies. These could help shift charging to periods when electricity demand is low, and supply is abundant. As with smart demand response, this creates greater flexibility for the grid while avoiding the expense of new electricity infrastructure.
• The emergence of small-scale energy systems. Digitalization would encourage more distributed energy resources (think household solar photovoltaic systems) and make it easier for these cottage energy producers to store and sell surplus electricity to the grid. Peer-to-peer electricity trade, within local energy communities, also becomes a possibility.

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