Power System's Digital Transformation - Microsoft

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Power System’s Digital TransformationPauline Henriot, Luis Munuera and Jacques Warichet, Energy Policy AnalystsWebinar ‘Implementation of Smart Grids in Indonesia’, 26 February 2021Page 1

Outline Trends in Power Systems- Focus on digitalisation The smart grid toolkit and benefits for Indonesia- Generation- Transmission- Distribution and consumers ConclusionsIEA 2021. All rights reserved.Page 2

Trends in Power SystemsIEA 2021. All rights reserved.Page 3

ASEAN is to expand renewable capacity by two-thirds in 2020-2025GWASEAN capacity growth by country, over 2020-254035302520151050VietnamSolar ioenergyRest of ASEANAccelerated caseTwo-thirds of ASEAN expected 45 GW renewable capacity growth will come from solar PV.Digitalization of grids will be the key to successful integration of renewables.IEA 2021. All rights reserved.Page 4

The digital transformation of the energy systemPre-digital energy systems are defined by unidirectional flows and distinct rolesIEA 2021. All rights reserved.Page 5

The digital transformation of the energy systemPre-digital energy systems are defined by unidirectional flows and distinct roles,digital technologies enable a multi-directional and highly integrated energy systemIEA 2021. All rights reserved.Page 6

201920006.1 billionPopulation68 trillionGDP14 PWhElectricity use0.4 billionInternet users0.9 EBInternet traffic7.7 billion130 trillion23 PWh4.1 billion2000 EBSources: UN (2019), World Population Prospects 2019; World Bank (2020), Data Bank: GDP, PPP (Constant 2017 International ); IEA (2020), Data and statistics;ITU (2020), Statistics; Cisco (2015), The History and Future of Internet Traffic; Cisco (2018), Cisco Visual Networking Index: Forecast and Trends, 2017–2022

Impacts of digital are everywhere – but digital technologies are “agnostic” SchlumbergerOil and gas Increased productivity, improvedsafety and environmentalperformance Could decrease production costsby 10-20%; recovery could beenhanced by 5%.Coal Coal mining can expect to seeimproved processes and reducedcosts as well as improvedenvironmental performancePower Power plants and electricitynetworks could see reduced O&Mcosts, extended life time,improved efficiencies andenhanced stability Savings of USD 80 billion per yearDigitalization is an enabler that accelerates the achievement of policy objectives: it can increase productivity, safetyor accelerate the pace of innovation in whichever direction framework policy points it towardsIEA 2021. All rights reserved.Page 8

Smarter buildings can unlock deeper energy savings while providing ers40Appliances30Lighting20Water heating10Space cooling0Space heatingBy sectorBy end useIEA analysisWidespread deployment of smart building controls could reduce energy use by 10% to 2040IEA 2021. All rights reserved.Page 9

Grids transform slowly – but digital is accelerating in many regionsInvestment in networks by equipment type350100%EV chargers75%Smart gridinfrastructurebillion USD (2019)300250Smart 16Overall grid investment declines : In 2019, investment inelectricity grids declined by 7% compared with 2018 levels, fallingunder USD 280 billion.IEA 2021. All rights reserved.201720182019Rest ofnetworksShare fromdigital gridinfrastructure but technology becomes smarter : Smart meters, utilityautomation and EV charging infrastructure, at USD 40 billion, nowmake up more than 15% of total spending.Page 10

Smart demand responseResidential sector1 billion households and11 billion smart appliancescould actively participate ininterconnected electricitysystemsDemand response programs – in buildings, industry and transport - could provide 185 GW of flexibility,and avoid USD 270 billion of investment in new electricity infrastructureIEA 2021. All rights reserved.Page 11

Smart charging of electric vehiclesEVs standard vs smart chargingCapacity requirement300 GW140 GW190 GW75 GW150 millionEVs500 millionEVsStandard chargingSmart chargingEVs smart charging would provide further flexibility to the gridsaving between USD 100-280 billion investment in new electricity infrastructureIEA 2021. All rights reserved.Page 12

Integration of variable renewablesCurtailment of solar PV and wind7%Digitalflexibility2040Digitalization can help integrate variable renewables by enabling grids to better match energy demand to times whenthe sun is shining and the wind is blowing.IEA 2021. All rights reserved.Page 13

The smart grid toolkitOpportunities for IndonesiaIEA 2021. All rights reserved.Page 14

A smart grid toolkit?“A smart grid is an electricity network that can intelligently integrate the actions of all usersconnected to it – generators, consumers and those that do both – in order to efficiently deliversustainable, economic and secure electricity supplies.”Definition by the European Technology Platform Smart GridData collectionIEA 2021. All rights reserved.Data processingEnhanced operationsPage 15

Beyond Generation and Grids Automation : data and advanced analyticsPotential worldwide cost savings from enhanced digitalization in power plants and electricity networks to 2040Cumulative savings from the widespread use of digital data and analytics in power plants and electricity networks couldaverage around USD 80 billion per yearFor CAPEX alone: USD 1.3 trillion of cumulative investment could be deferred until 2040IEA 2021. All rights reserved.Page 16

Capturing the benefits of Assets ManagementIncreased availability of grid and generation assets through predictive maintenanceGeneration scheduling and grid operational planning closer to real-timeFlexible maintenance schedulePredictive maintenance of plants from advanced analyticsExpertise and maintenance procedureBig data and advanced analytics toolsOperationsHardwareand SoftwareIEA 2021. All rights reserved.Sensors and ICT deployment, data collectionPage 17

The Digital Grid-friendly Power PlantModern wind or solar PV farms withadvanced sensors and controls Predictive maintenance Short-term generation forecasts Local controls to remain connected andsupport grid local f- and V-control (gridcode enabled) Centralised controls to manage gridcongestions and contribute to systemflexibilityIEA 2021. All rights reserved.Page 18

Case study: Iberdrola CORE In Toledo (Spain) CORE Control Centre for Renewablegeneration units- 7 GW installed capacity- Over 200 wind farms (over 6000turbines) and 70 mini hydro power plantsacross 9 countries- 2 million sensors Assets management Grid interfaceSource: IberdrolaIEA 2021. All rights reserved.Page 19

The central role of the Transmission gridDigital substationPlanning and OperationsShort-term weather forecastFault detectionRemote controlsAsset ManagementClose-to-real time operationalplanningRemote control of generation tooptimise VRE infeedControl RoomNew Generation SCADADynamic Security Assessment(DSA)Wide area monitoring andcontrol (WAMS, WAMPAC)Grid flows predictionDynamic Line Rating (DLR)Digitalisation contributes to power system efficiency, resilience and flexibilityIEA 2021. All rights reserved.Page 20

Case Study: Red Eléctrica de España CECRE (Spain)CECOEL: Electricity Transmission CC CECRE: Renewable CCCECORE: Local Network CCRESCC: Generation CompanyRenewable Energy Source CCCC: Control CentreCCconv: Generation CompanyConventional Generation CCSource: REE In Madrid Forecasts wind and solar over Spain Pre-calculates effects of grid faults on VRE Remote control of significant plantsThe combination of CORE and CECRE is an important factor in the successful integration of wind power in SpainIEA 2021. All rights reserved.Page 21

Capturing the benefits of Flexible GenerationOptimising lower-carbon generation thanks to flexible and dispatchable power plantsIntra-day Unit Dispatch based on merit orderRetrofit of existing power plantsNew contractual standards for PPAsFlexible and dispatchable new power plantsFrameworkOperationsBi-directional data flowsICT for remote control of significant grid usersGrid code requirements for new unitsHardwareand softwareIEA 2021. All rights reserved.Commercial structures and incentives for renewablesPage 22

Assets digitalisation benefits all players in the power systemImpact of digitalization on electricity sector assetsGreen: financialbenefits forasset ownerRed: systembenefit,consumerbenefitBlue: globalenvironmentalbenefitsDigitalization in the power sector has the potential to bring benefits to the ownersof power sector assets, the wider electricity system, consumers and the environmentIEA 2021. All rights reserved.Page 23

Digitalisation benefits: from source to consumptionReal-timecommunicationthroughsmart meters in buildings can lower thepeak demand by up to 8.9%.Advanced digitalized weather forecasting can reducecurtailment of wind generation by 10%.In 2017, US demand response program saved 1-4%of peak demand across each balancing authority.150 million EV would require 75GW withsmart charging, and 140GW withoutIEA 2021. All rights reserved.Page 24

Harnessing the load flexibility potentialTo meet the challenge of increased VRE integration, while maintaining affordable costs, the powersystem will need to better harness flexibility, including from the demand-side.Demand Response Potential6400 TWhTheoretical potential in 204015%of today’s potentialis tappedDigitalization & Energy A 2021. All rights reserved.Page 25

Application : Capturing flexibility for distributed generationManaging energy use to match local productionLoad management to provide flexibility for the networkDG benefits from services provided to the power systemDistributed generation observability and controlMatching production and consumption at building levelFrameworkSmart invertersOperationsBidirectional smart meterIncentive to self-produceHardwareand softwareIEA 2021. All rights reserved.Grid code for distributed generationPage 26

Application : Capturing the benefits for DSO operations Data collectionData processing Smart meter sensors Reduced non meteredenergy Better gridobservabilityEnhancedoperations andinvestments Increased billability /reduced non-technicallosses Reduced SAIDI/SAIFIEnel Italy reduced the System Average Interruption Duration Index (SAIDI, an indicator of gridquality) by 65%, and it is currently spending nearly one-third of its investment budget on digitaltechnologyReduced commercial losses are key in smart metering roll-out cost-benefit analysis.However, this can cause backlash from consumers supporting increased bills.IEA 2021. All rights reserved.Page 27

Data at the core of smart gridAs digitalisation spreads, data will become widespread. The issues will be to harness it tobenefit the power system and its usersData collectionData processingEnhanced operations andinvestments Smart meters Grid sensors IoT data Digital twin of distributionnetwork forecast of consumptionand generation Measuring flexibility Less outages thoughpredictive maintenance Better targeted investments Flexibility allows delayedinvestment Reduced (technical and nontechnical) lossesIEA 2021. All rights reserved.Page 28

ConclusionIEA 2021. All rights reserved.Page 29

The power sector landscape is changing dramaticallyTraditional systemCentralised / dispatchableHigh inertia and stabilityCentral planningOne way flows of energy and communicationClosed networks, few devicesNew systemDecentralised / variable generationLow system inertia from rotating machinesMultiple actors / competitive marketsTwo way flows of energy and communicationOpen networks and many devicesChanging climate patternsIEA 2021. All rights reserved.Page 30

Digitalisation is at the core of the power system transformation The Power System Transformation- Decarbonization- Decentralisation- Digitalisation Digitalisation is a game-changer for our ability to track and to control the energy system- Improve performance- Increase Stakeholders participation at all levels Design Investments OperationsIEA 2021. All rights reserved.Page 31

Towards smarter grids Investments in operational procedures- Updating current practises (including software enhancement)Investment inprocedures- Use existing technology- Updating procedures for new technology Investments in policy and institutions- Incentivising uptakeInvestment inpolicy andinstitutions- Tracking of uptake and utilisation (including software)- Requirements for new investments Investment in hardware: smart-ready infrastructureInvestment inhardware- Sensors and Meters- Retrofits in generationTo yield the benefits of digitalisation,procedures, policy and institutions must support hardwareIEA 2021. All rights reserved.Page 32

The IEA is committed to support IndonesiaFor the IEA:Smart grids in Indonesia is a holistic effortto digitalise and enhance technology,processes and institutionsin order to enablea clean and secure electricity system of the futureIEA 2021. All rights reserved.Page 33

The IEA's participation in this event was made possiblethrough the Clean Energy Transitions in EmergingEconomies programme has received funding from theEuropean Union’s Horizon 2020 research and innovationprogramme under grant agreement No 952363.IEA 2021. All rights reserved.Page 34

Backup slidesIEA 2021. All rights reserved.Page 35

Digital transformation is a step-wise, system-wide process involving many sectors and technologiesSystem operation andmarket rulesLevel of VRE penetrationPhase 6Syntheticfuels forpowergenerationPhase 5Reform of electricitytaxationPhase 4Phase 3Phase 2Reform of systemservices markets, retailtariff reformEffective short-termwholesale markets,trade with neighboursVRE forecasting,economic dispatchPhase 1Flexible resource planning and investmentPowerplantsAdvancedplant designFlexibilityfrom VREPlantretrofitsGridsLarge-scalenetworks tosmooth seasonalvariabilityDigitalisationand smart DSRStorageSystem-friendly VREdeploymentLong-termstorageNew loads viaelectrificationCommercialand residentialLarge industrialMedium-termstorageBattery storageUse of existingstorage, e.g.pumped hydroEnsure full systemservices capabilitiesfor large renewableenergy plantsDiversify location andtechnology, shift tomarket premiums, CfDsFocus on investmentcertainty (FITs,risk-free PPAs)Digitalisation is at the heart of the power system transformation but requires progressive investments.This includes improving enabling conditions, like grid practices and by creating a favourable investment environment.IEA 2021. All rights reserved.Page 36

Application: Dynamic Line Rating (DLR) for Transmission LinesExample from 380 kV OHLin Elia (Belgium)Source:Elia / Ampacimon Ampacity (Ampere Capacity): maximum current a conductor can carrywithout exceeding its temperature rating Ampacity is a function of ambient weather (temp, wind speed) EnablingfactorsAlgorithmsCalculate ampacityDigitalisationReal-time monitoring, communicationand controlLegal and regulatoryframeworkIncentives for cost-efficient gridoperationOperationsShort-term operational planningDLR reduces congestions and enables a more cost-effective generation dispatchCapturing the DLR benefits requires flexible operating practices to be incentivised by the legal frameworkIEA 2021. All rights reserved.Page 37

Impacts of digital are everywhere -but digital technologies are "agnostic" Oil and gas Increased productivity, improved safety and environmental performance Could decrease production costs by 10-20%; recovery could be enhanced by 5%. Coal Coal mining can expect to see improved processes and reduced costs as well as improved