2022 – the year of the smart grid

2022 is the year we act on our net-zero pledges from 2021, and no action is more vital than completing the energy transition. We have eight years to cut global emissions in half. So, in the interest of time, let’s get straight to the point: without smart grids, there will be no energy transition.

The International Energy Agency (IEA) cites grid integration as one of the top 4 challenges to increasing renewable energy capacity, alongside non-technical challenges (financing, permissions, and social acceptance).

From now to 2026, renewables could grow 60% faster than in the past five years, thanks to the maturity of wind and solar generation and the net-zero commitments of 137 countries. But to move from commitments to reality, we need smart grids to make that energy work. Smart grids perform four tasks critical to the energy transition. They boost grid resilience, increase renewable energy integration, drive down costs, and enable universal access to clean electricity.

The resilience of the grid is critical – clean electricity fails if we can’t use it – so let’s start there. Many people don’t know that in the past decade, smart grids helped save Europe from blackouts, while simultaneously supporting the transition to clean energy.

Long before the energy transition, spikes in electricity demand were stirring up grave concerns about the ageing grid infrastructure, and the potential for a blackout domino effect across Europe. So, when the energy transition started gaining steam in Germany, experts warned that exceeding 4% renewable generation could not only break the German grid, but could also impact its neighbours.

Fast forward to 2020. Germany surpassed all forecasts, reaching 45% renewable energy. 33% of that was from solar and wind, the most variable sources. Globally, we have reached 30% renewable electricity, and far from failing, grids around the world today are not only cleaner, but also more reliable and resilient, thanks to the combination of robust infrastructure and smart grid technology.

Digitalization allows us to turn the complexity of the modern grid from a weakness into a strength.

We all know, the grid was built for a steady supply of combustion-based energy, but solar and wind are variable. When they are not producing, the grid draws on fossil fuels as a backup.

But the modern grid is decentralized; we no longer rely solely on a few massive power plants. Distributed energy resources (DERs) are skyrocketing – from small solar and wind farms to electric vehicles (EVs), homes with solar panels, and commercial microgrids. Each passing year adds literally hundreds of millions of new supply and demand points to the grid. EVs are proliferating exponentially, with sales in the USA alone forecast to reach 26 million by 2030, up from 5.6 million this year.

Digitalization – sensors, artificial intelligence and automation – draws on the combined power of all those DERs, shifting electricity demand in buildings and EVs to times when solar and wind are available. So, cities can use more renewable energy, and less fossil-fuel backup energy. That demand flexibility also helps flatten demand peaks. In the EU alone, from now to 2030, smart grid flexibility could save billions annually, by preventing unnecessary infrastructure expansion. That also saves dwindling resources.

And the cost savings go deeper than that, extending to everyday electricity users. With smart grids and DERs, electricity users can shift from pure consumption to "prosumerism" – producing and consuming electricity, and even selling it back to the grid.

Imagine 26 million EV drivers with vehicle-to-grid charging. At 40 kWh per EV, they could sell enough clean electricity back to the grid to keep 100,000 US homes running for an entire year. Prosumerism could make clean electricity affordable for many more people.

In fact, the International Renewable Energy Agency also recommends smart grids for developing countries, to help them support rising electricity demand with renewable energy, while also generating new avenues of economic growth.

Universal accessibility to clean electricity is central to a successful energy transition. Emissions are border-free, and we need to make sure that anywhere people are cooking, heating, cooling, driving, etc., they are using safe, smart, sustainable electricity.

We may not yet have all the answers to achieving net-zero globally by 2050. We are still exploring the potential of green hydrogen and other innovations to tackle that last stretch of emissions across air and marine travel and heavy industry.

But we already have the technology we need to meet the UN Environment Program goal of halving global emissions by 2030. In fact, clean electrification of buildings, industry and transportation could eradicate three-fourths of global emissions.

For that, we need clean energy and smart grids to make it work, and both are ready to go. National commitments to the first are clear. Let’s make 2022 the year we put smart grids at the top of the energy transition agenda, on par with renewable energy, and put that energy to work for net-zero.

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