May-2024

Overcoming grid constraints via energy management solutions

How do you balance the demands of cost-effective energy against wider net zero targets when the landscape and timelines have changed?

Stuart Little
Powerstar

Article Summary

Energy efficiency is an important consideration in balancing all three components of the energy trilemma: sustainability, security, and affordabilty. The interplay of energy management technologies across a site’s infrastructure can aid the transition to resilient, cost-effective clean energy solutions.

Electrification plays a critical role in the move away from fossil fuels to fully renewable energy production and supply. For many businesses, especially those in energy-intensive sectors, the shift from carbon-intensive power to electrified technologies is a vital part of any environmental, social, and governance initiative or net zero strategy.

Investment in electric vehicles (EVs) alongside the installation of renewable assets such as solar panels or wind turbines is an obvious way to make a significant reduction in carbon emissions. However, these changes often present challenges of their own, especially when it comes to the rapid charging that is generally required for an EV fleet to operate effectively.

Grid constraints
Constraints to the local grid can prove a major issue when organisations are re-evaluating their energy infrastructure. In the UK alone, the predicted increase in demand for electricity is set to rise by 50% over the next decade (Climate Change Committee, 2020) This is across a grid that was originally designed to work on a centralised model of generation and supply, with large-scale power plants connected to the high-voltage transmission network.

The transition to a more localised model, based on smaller-scale renewable assets connected at the distribution network level, creates significant stress locally and issues for distribution network operators (DNOs). These are becoming increasingly important factors in any organisation’s carbon reduction initiative.

An additional increase in electrical equipment may take a site over its agreed supply capacity (ASC), which can lead to the DNO imposing excess capacity charges. In such a case, an application to increase ASC can resolve the issue, increasing monthly electricity bills but avoiding punitive surcharges.

Potentially more significant is the scenario where a site is already close to its available capacity or where a proposed project will take it over the capacity the DNO is obliged to provide. This can relate to both demand, such as EV charging, and supply, such as the increased export of power from on-site renewable assets, which may impact the DNO’s resilience.

In this instance, it may be necessary to apply to the DNO for additional grid connections. However, if the DNO deems such additional demand may affect the network as a whole, it may be legally obliged to refuse such a request, making the proposed electrification project untenable from the outset. Where an application is permissible, there are still hurdles to overcome.

Cost can be prohibitive when considered as part of the overall project budget, with the National Grid estimating an average £65,000 connection price for a large organisation (National Grid, 2024). Lead times can also present a major stumbling block. While Ofgem is attempting to remove projects viewed as ‘unrealistic’ from the waiting list, the average time for a connection is approximately two years. The massive increase in applications means that some companies are being advised they face lead times of more than a decade (Lamb, 2024).

While the UK as a whole has legally binding net zero targets, businesses are increasingly driven by the demands of stakeholders (shareholders, investors, customers, or employees) to demonstrate clear and unambiguous carbon reduction strategies. Realistic, feasible, and cost-effective solutions are paramount if these goals are to be achieved. Increasingly, the option of a smart microgrid is proving a viable solution that can futureproof energy infrastructure at the local level.

Smart microgrids
A smart microgrid (see Figure 1) manages a range of energy management assets, operating as a localised energy system that can run independently or in conjunction with the wider, centralised grid. As a solution to the issue of grid constraints, implementing a microgrid offers greater control over energy spend while improving power resilience, given the control it provides over supply and demand.

Where a combination of energy management technologies is managed by AI-driven control systems, advanced algorithms and machine learning enable real-time decision-making. Detailed data relating to supply and demand can inform maintenance scheduling, strategic load planning, and an overview of potential failure points, as well as provide the data critical for accurate sustainability measurement and reporting.

As more assets are added to the microgrid, the better it will perform, learning and improving as it gathers more data. The interplay of a range of assets and technologies, managed by AI-driven control software, offers a powerful solution for organisations requiring resilient, cost-effective, and sustainable energy.

Typically, a microgrid consists of distributed energy resources and technologies such as battery energy storage systems (BESS), low loss transformers, and voltage optimisation (VO) assets, all managed by the microgrid controller. Given that every microgrid project will be different, with individual site issues and constraints, differing business models and energy demand, and individual business imperatives, it is crucial to both establish the viability of a project prior to commissioning and quantify the benefits of any investment. Hence, we now look at each of these technologies in more detail.

Battery energy storage systems
A BESS (see Figure 2) stores generated energy for use when needed and is critical to any microgrid project. On-site renewable assets such as solar are inherently inflexible or intermittent, given that they are dependent on weather conditions. A BESS enables the purchase of grid energy when prices are lowest, generally overnight, and at the times when grid power is produced with lowest emissions.

Where organisations are increasing electrification to a site, a BESS can be critical in allowing for high-demand technologies such as EV charging by circumventing the need to rely solely on grid supply. If the BESS also includes an uninterruptible power supply (UPS) element, this offers additional benefits, including power resilience and potential cost-savings, both crucial as we shift to an increasingly electrified world.