90% of power distribution systems not ready for energy transition: Siemens

The vast majority of electricity distribution system operators are not ready to accommodate the increase in demand that will come with the energy transition, Sabine Erlinghagen, CEO Digital Grid at Siemens Smart Infrastructure, said June 22.

Surveying distribution system operators around the globe, or looking at studies and market research, shows around 90% of them are not ready for the increased demand that rising electrification will bring, Erlinghagen said at the Reuters Global Energy Transition conference.

The grids were not technologically ready, and lacked the flexibility, security and maturity, she said.

"The straight answer is they are not," Erlinghagen said. "That's not my voice," but grid operators' own reports, she added.

"Distributed energy resources are on the rise. We expect a seven-times growth over the next 10 years. This is causing mindboggling challenges to grid operators, especially when you go to the low-voltage distribution grids."

70% of the world's grids are planned using Siemens Smart Infrastructure software, Erlinghagen said.

Simply copying existing high-voltage solutions will not solve the problem, she noted, as costs would be so high as to be uneconomical, and the rollout would not be quick enough. Instead, Erlinghagen said more investment was needed in smaller-scale smart grids.

For example, consumer meter data was a "rich source of information" that is "massively underutilized," she said. It could be used to increase transparency and for better planning, in addition to billing.

The transaction costs for setting up dispersed, decentralized micro-grids in settings such as a university campus, hospital or small community were a barrier, Erlinghagen said, with organizations struggling with planning, financial and technical feasibility, installation, operation and finance.

Technology exists, investment needed

Iberdrola chief innovation and sustainability officer Augustin Delgado said the technology required existed, but further investment was needed.

"We have today the technology to start the energy transition and to make it meaningful," Delgado said. "We have solar, we have wind, we have batteries that are going to improve mobility, we have heat pumps. We have the technology for smart system networks."

Low power prices would come with the installation of more cheap renewables generation capacity, he said, pointing to low hourly grid pricing in Spain. With such pricing, in combination with smart grids and meters, the demand side of the energy transition could help level out peaks and troughs in supply and demand, he noted.

Erlinghagen noted that renewable power generation assets were already at cost parity with or below coal and sometimes gas generation, but added that there was some way to go with bringing down costs for battery storage. However, developing economies of scale would help.

Edison International CEO Pedro Pizarro said the energy transition and the anticipated huge increase in electricity demand would require strong grids, but noted that system operators will have to become "coordinators" rather than "controllers" of networks.

Cyber security

Given the rise in smart grid technology, cyber security was a major concern, Pizarro said.

"The reality is that as we go from managing hundreds of devices in a network, to thousands to millions, the attack surface for cybersecurity -- the surface we must protect -- becomes that much larger and more complex," he said.

"Engineering cybersecurity in from the beginning will be a critical part of this," Pizarro added.