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The effects of the introduction of smart grids

https://doi.org/10.17747/2078-8886-2018-2-92-101

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Abstract

Digitalization of the economy is one of the priorities of the Long-term development strategy of the Russian Federation. One of the key components of the digital economy is Smart grids.
This study aims to identify and systematize the technological, economic and other effects of the introduction of intelligent energy networks. The sources of these effects can either be a transition to digital management in the electricity industry, or a change in the behavior patterns of consumer companies, business practices of energy supply and service companies.

For citations:


Hovalova T.V., Zholnerchik S.S. The effects of the introduction of smart grids. Strategic decisions and risk management. 2018;(2):92-101. https://doi.org/10.17747/2078-8886-2018-2-92-101

INTRODUCTION

New technologies are especially relevant for Russia, which has a historical large-scale centralized energy supply system, and it's more than 2.5 million miles of transmission lines, about 500 thousand substations, 700 power plants with a capacity of more than 5 MW. In terms of production and consumption Russia is one of the largest energy markets in the world, so we can say that the development potential of the industry is huge. Electric power complex of Russia is on the threshold of sig­nificant changes that will change the model of the functioning of the industry in the future. The ne­cessity of changes is caused by the factors that, on the one hand, are connected with the increase of the requirements of the concerned parties, and on the other hand - inside troubles of the industry.

 

Table 1

Problems of energy sector development in Russia

Factor

Indicator

Long distances and low load density(network assets per 1 kW)

1.5-3.0 times more, 1.5-3.0 times more,

Eligh cost of capital

2-3 times higher than in Europe

Eligh cost of construction

20-40% higher than in Eiuope

The low loading of network and generating capacity

Load of magistral grid complex is 26%, of distributional - 32%; installed capacity utilization factor - 50%

Low labor productivity (amount of workers for IMW of installed capacity

10 times less workers than in the US

The latter include high functional obsolescence of the equipment used, the shortage of qualified staff, high cost of the capital and construction, insufficient load of the network and generating ca­pacities, low labor productivity [Nalbandian H. H., Zholnerchik S. S., 2018; Linder N. V., Lisovskyi A. L., 2017; Trachuk A. V., 2011b] table. I). The situation is aggravated by the presence of cross-subsidization, industrial and commercial consumers have to make up for the public subsidies [Linder N. V. Trachuk A.. V., 2017; Khovalova Т. V., 2017; Zolotova I. Yu. 2017], as a result of price misalignment for in­dustrial and commercial consumers it's set one of the world's highest electricity prices [Trachuk A.. V., Linder N. V., 2017; Trachuk A. B., Linder N. V., Zubakin V. A. et al., 2017]. In Russia the final cost of electrical energy includes both the fee for the generating capacity, and for the fee for maintenance of the grids, that is independ­ent from the consumption volume [Trachuk A. V., 2010b; Dolmatov I. A., Zolotova I. Yu, Maskaiev I. V., 2017]. These and other factors limit the competitiveness of the economy of the country, make it difficult for its industrial devel­opment. [Digital energy, [b.g.] (table 1).

Changing of the technological and eco­nomic model of the electricity in industrialized countries cannot be ignored primarily because of electric pow­er industry can become expensive and uncompetitive. The best option for the development of the industry is the transformation of the existing model of the Russian electrical energy industry to the network of producers and consumers connected by a common infrastructure.

In this study, the aim is to identify and systematize the tech­nological, economic and other effects from the implementation of smart grids. Specified effects can occur as a result of the transition to digital ways of the management techniques in the electricity in­dustry, changes in the patterns of behavior of consumers, business practices of the utility and service companies.

THE IMPACT OF SMART GRID TECHNOLOGY ON THE PERFORMANCE OFTHE ENERGY SECTOR

Aging of basic funds and the dynamics of the electricity demand determine the beginning of a new investment cycle in 2022-2025 and according to the Ministry of energy of the Russian Federation, the modernization of power facilities and construc­tion of new facilities will require more than 200 billion dollars of investment. Moreover, the development of a distributed net­work will require about $ 50 billion. [Trachuk A. V., 2010a], The solution of the problems is seen in the radical restructuring of the existing technological and economic models of the electric power complex, primarily in its digitization. Table 2 shows the key dif­ferences between the new energy paradigm and the current one, [Digital transition [s.a.]].

The economy digitalization is one of the priorities endorsed by the programme documents defining the long-term develop­ment strategy of Russia. The digitalization of the electric power industry can, in particular, be understood as the introduction of various automation elements, creating an integrated "smart" grid.

 

Table 2

Comparison of traditional and new energy paradigms

The current (dominant) energy paradigm

Approaching energy paradigm

Dominance of energy sources based on hydrocarbon fuel

«Clean energy» of RES.

Large vertically integrated energy companies with powerful reactors, large deposits, large processing facilities

Decentralized markets, private investment

Centralized electrical networks

Intellectualization of basic infrastructure, development of technologies for smart rids

Simultaneity of electric energy flows - from generating unit to the consumer

The transition of consumers to the active behavior (active consumer at the center of the grid).

Simultaneity of electric energy production processes and consumption

Teclmologies of energy accumulation are as "stored" goods.

The widespread use of fossil fuels in the manufacturing industry and transport

The deepening of the production sector electrification and transport.

In accordance with the definition given in one of the strate­gic documents of the Russian Federation, smart energy systems of the future include the smart power system; it is assumed the integration of different types of energy resources and means of distributed generation. Expectedresults of the of such projects im­plementation: quality improvement of the manageability, reliabil­ity, and efficiency of the basic energy systems, including electric power [Projection of scientific and technological development of the RF, 2014].

In the literature there is no single definition of the smart grid, but the essence of different approaches boils down to the fact that smart grid is a combination of information and communication applications that combine the generation, the transmission, the distribution, and technology of the end users; it's the system in­tegration [Smart Grid 101, [s.a.]]. This is the grid, which is based on the analogue technology of the twentieth century and has been converted to use digital technology for communications, monitor­ing, computation and control; a large part of the situational infor­mation necessary to ensure safe, efficient and reliable operation of the grid, is in its digital information infrastructure [Software Engineering Institute, 2010]. The smart grid has also been defined as "the system of delivery of electricity from the energy generat­ing companies to consumers, integrated with communication and information technologies and providing improved transparency of the functioning of the power system, quality service to custom­ers and providing environmental benefits" [Smart Grid Informa­tion [s.a.]]. You can also say that Smart Grid is a technology that allows to transmit and distribute energy on a new technological level between distributed generation sources and consumers that use electric energy both in a stationary way (buildings, industry facilities) and in the process of movement (cars, gadgets).

Changes in the technologies and the economy require to im­prove the characteristics of the grid complex, and it is a global trend. So, in the documents that define the direction of technologi­cal development in the electric power industry of the United States it's noted that the changes in demand, generation structure, inte­gration of RES, problems with reliability and security require the innovations to improve key characteristics of the electricity trans­mission and distribution systems. The requirements for this system determine the smart grid: system must be flexible in terms of the model of supply and demand, have low operational losses, be sus­tainable, accessible and safe [Technology development, 2018].

The modem power system is a vertically integrated structure which in the future will be transformed into a horizontal grid, where supply and demand are regulated with the use of smart meters, promoting the bidirectional transmission of information [Trachuk A. V., 2011a],

It appears that the introduction of smart grids will contribute significantly to improving the efficiency of industry and reliability of its infrastructure, to reduce expenses for the electricity produc­ers and consumers. "Smart" grids will open new opportunities for the industry development. The implementation of smart grids has arisen from the significant need related to the changing of the consumers' role, the increasing demands for reliability, and quality of the grid. The basis of the smart grids concept is shown in Fig. I [Kobets 1.1., Volkova I. O., Okorokov V. R, 2010].

It appears that the key features of the smart grid are the cus­tomer orientation and informational support.

Customer-focusedness. In the emerging system, the consumer has a key role of an active participant: he affects the system and optimizes its work, in his role both of a consumer and a produc­er of electric energy. The consumer is responsible for generating the requirements to the volume, timing, sources, and quality of energy consumed. The implementation of innovation, informa­tion and communication, and computer technologies contributes to a greater control over the individual elements and the system as a whole. Such mechanisms include the "smart" metering for the two-way transmission of information between consumer and producer. This helps to build a kind of virtual map of the physical world, the developing system allows, for example, quickly and efficiently to determine the location of the accident and to forward the energy flows to minimize the damage to consumers and to avoid increasing of the scale of the accident.

Infonnation. This is the main tool for system control, with the result that the system becomes not of electrical power, but the en- ergy-information.

THE ELEMENTS AND EFFECTS OF IMPLEMENTATION OF SMART GRIDS

The model of modem electric power industry does not deny and does not preclude the existence of a centralized supply sys­tem, but there are elements of the smart power sector, not signifi­cant for electric power industry of the twentieth century:

  • consumers, including those with private, and also surplus generation;
  • micro-grids, distributing the electrical power among a small group of consumers, not integrated in a centralized energy system;
  • distributed generation, including renewable energy sources;
  • demand management;
  • smart metering;
  • modem systems of storage of electricity. Given the formation of new elements of the system of electrical networks, the discussion of which is given next, can be grouped, focusing on stakeholders:
  • for industrial consumers:

о income from electricity sales о managed optimization of energy costs;

о reduction of price and technological risks associated with centralized power supply;

о provision of independent or integrated operation with existing network infrastructure, improving the availability of electricity;

о the possibility of using different types of generation;

  • for domestic consumers:

о optimizing the cost of electricity due to various factors - from extension of suppliers competitive environment to the additional income from the reduction of the investment component in the electricity industry as a whole;

  • for science, IT sector and manufacturing industry:

о the emergence of a sustained domestic demand for high-tech equipment (alternatives for generation and electricity storage) and software;

о the growth of competitiveness, the possibility to export the technical and software solutions within a context of growing global demand;

  • for network complex:

о the increase in the number of technological connections in relation to development of the distributed generation;

о reduction of losses due to the introduction of smart metering;

о the increase in volumes of flows in the network.

Consumers. In the traditional model of the power generat­ing industry, the key consumers always played a passive role, but present customers have been building their own generating facilities, especially in energy-intensive industries. Moreover, the population as a consumer strives to develop their own generat­ing facilities, including based on the renewable energy sources. Therefore, a consumer of a new type that can simultaneously be a consumer and producer of electricity in the implementation of an appropriate model of the market. In countries where the share of distributed generation is high, there is the problem of integration of such consumers in the market system; it is one of the important reasons for the development of smart energy. The surplus, pro­duced at the generation of consumers, are used to create individual reserves through electricity storage or are sold to other consumers, in this case we are talking about the decentralization of electricity production, and the development of distributed generation [Tra­chuk A. V., Lmder N. V., 2018].

Distributed generation. The effects of implementation of “smart” grids are determined, in particular, by the development of set of power plants located close to energy consumption and connected or direct - but to the consumer or to the electrical dis­tribution system (in the case of consumers) [Khokhlov A., Mel­nikov Yu., Veselov, F., et al., 2018].]. Type of used primary energy source, the identity of the station from the point of view of own­ership does not matter.

The efficiency of distributed energy can be comparable with the implementation of the capacity of large power stations; also due to the close location to the consumer it has lower network losses in power distribution. This system meets the requirements of the consumers about the availability and quality of electric en­ergy and provides the higher reliability of consumption. A distrib­uted network of energy sources enhances the energy security, as it allows reducing the risks of complete isolation and the disrup­tion of energy supply facilities, especially in remote regions of the country.

A distributed network can quickly adapt to emergency situa­tions associated with natural disasters, accidents. On the basis of well-developed energy infrastructure, distributed storage and pro­cessing of data, the distributed generation is similar to the Internet, therefore the new energy system you can call the Internet of energy [Shulga S., 2015; KhokhlovA., VeselovF., 2017]. Internet energy can also be called the alternative energy system operating on dif­ferent principles and with other subjects against the existing one.

In the modem electric power industry, the distributed gener­ation is generally understood as the generation using renewable energy sources (RES). Today, the share of RES in the total struc­ture of the Russian production is not big [Report [s.a.]], just over 2% of the installed capacity) (Fig. 2), but it's growing [Zubakin V. A., Kovshov N. M., 2015; Balyberdin V., 2015]. Reducing the cost of electricity to renewable energy sources is the reason for the growth of its production.

So, from 1980 to 2013, the cost of wind turbines decreased by 10 times, the cost of solar power plants dropped by 70% between 2009 and 2014, [the Digital transition, 2017]. Notably, the expert estimation of the normalized cost of electricity (including life cy­cle costs) for alternative energy show a steady trend: the prime cost of the electricity production from renewable energy sources is approaching to them traditional technologies.

In NorthAmerica and Western Europe "smart" grids allow to organize the movement of electricity in two directions, actively involving households in the market where they can sell the excess electricity generated from renewable sources [Klimovets О. V., Zubakin V. A.., 2016].

Demand response is the regulation of energy consumption depending on the time of day and in response to market signals. This is one of the key components of distributed generation [Flow to remove (Как izvlech), 2016]. Inthe case of voluntary reduction of electricity consumption during the peak hours the customer re­ceives a cash reward. New technologies allow increasing the ob­servability, controllability and economic efficiency of the power system. So, in recent years System Operator of the Unified Power System could radically (in 24 times) reduce the time of issuance of plan targets to the power plants in the framework of balancing market - from I time per day to I time per hour. Now the pow­er plant may upload its power and to change the schedule of the hourly load, earlier, regardless of the phenomena of the ability it had to wait a whole day. System Operator of the Unified Power System had introduced an element of demand management in or­der for economically viable ways to increase the flexibility in the management of the system and to find an alternative to construc­tion of new facilities. The more opportunities to control the mode of operation of the power system, the more effectively you can use the network infrastructure and generation.

 

Fig. 2. Structure of installed capacities by type of power plant, %

While in the Russian wholesale market, the cost-depending reducing of the consumption is not sufficiently widespread [Dzi­uba A. P., Solovieva I. A., 2018]. The reasons for the slow distri­bution are difficult conditions for small and medium consumers, difficult calculated effects of energy supply companies [Modern­ization, 2017]. Presently, to meet the demand during peak hours, the System Operator of the Unified Power System is forced to use the most expensive power plants, which leads to the fact that the price includes not only the cost of power generation, but costs on a per start for backup generators. Demand response will allow abandoning the use of expensive, inefficient generation, resulting in increased prices for electric energy. The assessment of annual savings will be 1.6 million rubles per year, if the demand manage­ment is used. [Modernization, 2017].

The calculation of the effects of participation in the mecha­nism of the cost-depending consumption reduce for a typical con­sumer:

  • payment for the cost-depending consumption reduce mechanism (+2.7 million RUB / year);
  • the decline in purchasing power (+0,4 million RUB /year);
  • reduction in the purchase price of electricity (+ 0.05 million RUB/year);
  • оплата отклонений при завышении плана (- 1,5 million RUB / year);
  • ensuring fulfillment of obligations (- 0.1 million RUB /year).

While the mechanism of demand response involves only 69 MW of the connected capacity of aluminum smelters of "RUS­AL ", one of the largest consumers of electricity in the second price zone. From January to May 2017 year the paid reduction of the load did not exceed 64 Mw, or 1% of target consumption of plants. As a result, without any financial investment on the part of the company the economic effect of 25 million RUB was achieved.

The economic effect from cost-depending reduction of the power consumption gets not the System Operator of the Unified Power System as the administrator of the energy system and not "RUSAL" as its participant, and consumers in a whole. In the absence of explicit sponsor and beneficiary, the system will not develop without the active participation of the state. The launch of the demand response mechanism had only become possible since the summer of 2016 [Resolution 2016]. Demand response requires a systematic approach. So, in the US, for example, in 2010, the Federal regulator adopted the "National action plan on demand response" [National action plan, 2010].

Smart Metering

- advanced electricity metering, using the modem com­plexes of software and hardware, including installation of smart meters on the consumer side. Thus, the regular survey, data collec­tion and processing, provision of information on energy consump­tion, and automatic and remote control are provided.

The advantages of using modem accounting:

  • ensuring accurate measurement of energy consumption;
  • automated and efficient processing, transmission and presentation on the level of consumption;
  • control of consumption mode;
  • the possibility of closing a balance sheet for groups of counters and the data comparison to identify the facts of unauthorized consumption;
  • obtaining information about the actual losses in electric networks;
  • the ability to remotely restrict or disable power consumption;
  • evaluation of the effectiveness of measures aimed at energy saving;
  • power flow control [Nesterov I. M., 2013].

Modem accounting system is designed to transmit infor­mation on the actual consumption of electrical energy in the online mode. To date, the retail energy market in Russia is equipped with automated metering for only 9%. However, smart metering is the first stage of the introduction of smart grid, which allows, in par­ticular, quickly to find areas where losses are generated. So, JSC "Rosseti" has already launched the pilot projects of implementa­tion and use of smart meters; together with the Russian Direct In­vestment Fund, the company is implementing the pilot projects in Kaliningrad, Yaroslavl and Tula. The development of smart grids could also be accompanied by public funding, for example in the United States the amount was $ 4.5 billion. [Recovery Act, [s.a.]].

It is anticipated that the development of "smart" metering will be due to the combination of the tariff and non-standard sources. In pilot regions the meters are put by the investor, they are paid back for themselves in savings from reduced losses. But the unre­solved issue of identification and tenure of savings from reduction of losses does not allow replicating existing good practices. The introduction of Smart Metering could allow approaching to the best world practices, when the losses do not exceed 5-6%, which in absolute terms saves up to 40 billion rubles per year.

As measures contributing to the implementation of systems of "smart" metering, the Ministry of energy in 2018 plans to ban territorial network organizations to upgrade old metering devices that do not meet the requirements introduced by "smart" grid.

The introduction of elements of "smart" metering will reduce the number of accidents on the network by timely receipt of infor­mation on non-normative equipment operating mode and timely preventive repairs.

In respect of natural monopoly entities in the electric power industry it's established the mandatory use of the automated re­mote collection of data on the volume of the consumed resources [Forecast of the socio-economic development, 2017].

In Russia, there are only about 80 million electricity meter­ing units, with about 9% (7 million units) are already equipped with smart meters. According to some estimates, in Russia there are more than 40 million consumers living in apartment build­ings, 15 million of private residences and more than 12 thousand of fuel filling stations, more than 2.5 million small and medium enterprises. Most of the new equipment (transformers, switches) already has a system for remote diagnosis [Dolmatov I., Zoloto­va I., 2015].

By 2020, Europe will have installed more than 237 million of the smart meters of electricity, almost 90% of installed electricity meters will be " smart". Still, the economic crisis in Europe has not been an obstacle for the programs of smart meters, on the contra­ry, it provides additional pressure on utilities and governments to ensure the realization of the benefits of smart meters [Woods E., StrotherN., 2012].

At the level of system, balance and modes control in the elec­tricity industry, a step towards the joining of the various devices and probes in a single system will allow to effectively plan the load of the generation facilities and, most importantly, their vol­ume. As the Russian energy system is built on the redundancy, the creation of the smart distribution model will allow us to take part of the uneffective generation out of operation and to partial­ly solve the problem of oversupply of generating capacities (an increase from 215 GW in 2008 to 235 GW in 2016 due to the absence of correlated consumption growth).

Given the length of linear-type facilities in the electricity sec­tor, the increasing implementation of smart technologies could lead to increased reliability and lower operating costs. The practice of network management "on the state" would become the reality. For example, for the current moment the generating equipment is being repaired only on schedule, the implementation of "smart" grids will allow to monitor the status of equipment and carry out repairs on-demand, as needed. For the purposes of regulatory consolidation of such opportunity in early 2017, the Ministry of Energy of the Russian Federation proposed to consolidate by the government resolution the changes of the relevant regulations for the repair of JSC "Rosseti".

The need for smart metering requires improvement of the reg­ulatory base. From the point of view of the evaluation of public policies and the legal framework for the implementation of smart metering systems the European countries, for example, are at dif­ferent levels of development. So, as of 2012, the maximum clear regulatory framework and a clear strategy had been developed in Finland, France and the Netherlands, while in Lithuania, Slova­kia, Latvia and Luxembourg the strategy and regulatory frame­work were absent. Other EU countries were at various intermedi­ate stages according to these criteria [Hierzinger R., Albu H. van Elburg M. etal.,2012]

The effects from the deployment of smart metering can be di­vided into four main groups:

  • the benefits received directly from the deployment of smart metering (for example, reduced energy losses, reduced monetary payment of households using different tariffs);
  • reducing the costs of the development of the smart grid through the use of existing infrastructure of the smart metering (for example, connection and integration of distributed household generations); functional characteristics of the extensive modem smart metering systems not only solve problems of accounting, but also support a range of functions/technologies of the smart grid (e.g., demand management in real-time, automation, power distribution, etc.);
  • benefits from the deployment of smart metering (for example, reduced time outages consumers La, etc.) to achieve which you have to implement separate elements of the smart grid (e.g., automation of the distribution of networks, demand-side management in real time);
  • other effects from the deployment of smart metering for society and the state, which are difficult to measure quantitatively, such as social effects (involvement of consumers, increase of public trust in energy companies, job creation, etc.), the contribution to the achievement of strategic objectives of development of the industry (increase of reliability, the development of retail electricity markets, etc.).

As it was shown by ongoing projects, the smart metering pro­vides benefits both for the consumer and for energy companies.

Companies are getting more reliable timely information and op­timize their costs. The Table 3 presents the key effects expected from results of implementation of "smart" metering, in terms of the network companies.

 

Table 3

The expected effects of the introduction of smart metering [Smart records 2010]

Area

Effect

Long-term

Practical short-term

State

Rie reduction in the energy consumption by 20%; the transparency of energy consumption

Generation

The potential reduction in the volume of new capacities by 20%; smoothing of power consumption peaks

Networks

Reduction of electricity losses by 50%;

Reduction of the operating expenses through the reduction in staff, maintenance and repair up to 10%

Reduction of electricity losses by 50% due to commercial losses;

Sales

Improvement of debt turnover of 30%;

reduction of the number of calls of the consumers by 30%

reduction of operating expenses by 10%

Consimier

A higher level of satisfaction with the quality of energy supply; the opportunity to manage the volume and cost of its energy consumption with informing

Goes into reduced operating costs of 5%

EFFECTS OF ELECTRICITY STORAGE SYSTEMS

The need of mechanisms of the electricity accumulation is con­nected with the peculiarity of electric energy as a commodity. At any point in time it must be produced exactly as much energy as it is required by the consumer. Accordingly, it is necessary to build and maintain reserve capacities that allow consistently providing consumers with electricity. The problem is complicated by the fact that depending on the time of day the consumption of electric pow­er varies, so over time the power can work in a suboptimal regime. Moreover, a partial transition to renewable energy sources, that can be used a limited amount of time, depending on weather condi­tions, also requires the technologies to accumulate the energy.

Power system is aimed to provide multiple reversible accumu­lation of electric energy and to be able to act both as a consumer (in charge mode) and the source of electric energy (in discharge mode). The volume of Russian market of the electricity storage systems from 2025 will be able to reach $ 8 billion per year that will give the state economy the effect (excluding the investment) at the level of $ 10 billion per year (Concept [b.g.]) (table. 4).

 

Table 4

Assessment of markets and the effects of electricity storage systems implementation (from 2025), bln USD

Parameter

Internet energies

New general scheme

Export of hydrogen

Tlie annual volume of the world market

56.7

18.3

30.0

Tlie annual volume of the Russian market:

conservative

optimistic

0.7

1.9

0.2

4.0

0.5**

2 9**

The annual effect on the economy of the Russian Federation excluding the

investment:

conservative

optimistic

1.1 (0.5*) 2.1(1.0)

0.4(0.18) 2.6 (0.37)

I I***

6.3***

* In parentheses are the share of exports. * * Production systems. * * * Export.

Internet of energy will be used in electric energy supply of isolat­ed and remote areas, in the power supply systems of residential areas, in the power supply system of industrial and commercial consumers, in the electric transport and charging infrastructure, in other cases (mobile emergency power units, collaborative UPS, services for the electric energy quality improvement). The new scheme involves the management of the daily consumption schedule, the power quality management, the backup power grid and other system services. Sce­narios of usage of energy storage units for gadgets, equipment, ro­bots and domestic appliances are not included to the concept project. In the Table 4 there are the values taking into account the dollar as for the Central Bank on 04.03.2017: 1 USD = 58.9 RUB.

There are other possible effects of implementation the elec­tric energy accumulation systems for the stakeholders:

  • For generation. The use of storage will allow to optimize the process of electricity production by equalizing the load on the most expensive generating equipment, will reduce the level of cross-subsidization between heating and elec­tric energy, that exists at the present moment. This will inev­itably lead to the reduction in costs of hydrocarbon fuel, the increase of the coefficient of installed capacity usage at the power plants, will increase the supply reliability and reduce the need for the construction of new facilities. The storage facilities allow you to create an energy reserve without the excess work of generating capacities, to optimize the mode of operation of the power plants, to ensure a peaceful pass­ing of the night minimum loads and day maximum loads.
  • For consumers. Electricity becomes cheaper, the reliability of energy becomes higher, it is possible to ensure the op­eration of critical equipment during power outages and to create a reserve in case of accidents.
  • For the power grid. The storage facilities reduce peak load on the substation and the costs for up­grading the network infrastructure, improve the quality and reliability of power supply of con­sumers [Batrakov A., ShaposhnikovD., 2017].

 

Fig. 3. The effect of reducing the electricity consumption in peak hours in every working day for a typical user (user is in the first price zone, power is less than 50 MW) [Posypanko N., 2017]

THE FACTORS OBSTRUCTING THE DEVELOPMENT OF SMART GRIDS

The emergence of new actors in the demand management limits the requirement to the minimum amount of consumption. In the price-dependent consumption, only players of the wholesale electricity market that have a capacity of more than 5 MW can participate. Power reduction can be up to 2 MW/h. In practice, this limitation of the loads without stopping the production can by provided by the consumer, the power consump­tion of which is above 40 MW. As a result of these restrictions the number of potential participants of cost-dependant consumption is narrowed down. So, in the United States a significant proportion of capacity that is reserved to decline, is provided by the small busi­ness and population, i.e., the participants in the retail market that are involved in this mechanism on equal terms with the industrial companies.

Power reduction may be paid only if, after the operator's com­mand the actual consumption is below the planned application. The consumer with the power of 50 MW the average planning accuracy is 5% for each hour of the day, however, a possible error can be more than 25%. As a result, in order the operator be enable to register the load reduction for 2 MW, the consumption should always be inflated on the basis of error.

 

Table 5

The expected effect of the implementation of smart grids in various industries

Indicator

Mining, manufacturing, production and distribution of electricity, gas and water

Agriculture, hunting and

forestry

Construction

Wholesale and retail trade

Transport and communications

2020

Consumption forecast:

 

 

 

 

 

standard

650

20

15

40

102

with the introduction of smart grids

591

18

13

36

93

Effect

58

2

1

4

9

2025

Consumption forecast:

 

 

 

 

 

standard

708

21

16

43

111

with the introduction of smart grids

644

20

14

39

101

Effect

64

2

1

4

10

2030

Consumption forecast:

 

 

 

 

 

standard

766

23

17

47

120

with the introduction of smart grids

697

21

16

43

109

Effect

69

2

2

4

11

2035

Consumption forecast:

 

 

 

 

 

standard

825

25

18

50

129

with the introduction of smart grids

750

23

17

46

117

Effect

74

2

2

5

12

Then the consumer has to pay a deviation that reduces the effect that he could obtain from participation in cost-depending consumption. Accordingly, to obtain the most significant effect of the participation in cost-depending consumption it is necessary to accurately plan your workload.

It is worth noting that today the companies are already shifting the consumption to off-peak for their region hours, as a result, there are the electricity savings of 1-2% (Fig. 3). By reducing the load in the unified energy system by 0.3%, the price in certain hours could fall more than for 4% [Report [s.a.]].

THE EFFECTS OFTHE IMPLEMENTATION OF SMART GRIDS IN VARIOUS INDUSTRIES

The effects of smart grids include the development of infor­mation technologies, both in the technological part and in the soft­ware. First of all, we can say that the smart grid is the Internet of things. That's the name of the computer networks that connects things (physical objects) with integrated information technologies to communicate with each other or with the environment without human intervention [Decree, 2017]. However, to date the imple­mentation of this concept in the Russian energy sector is at an early stage. With the aim of development in generating, for ex­ample, the Ministry of energy jointly with JSC "ROSNANO" and OJSC "Rostelecom" forms the national project for the industrial Internet on the basis of the pilot project of system development of remote monitoring and diagnosis of CCGT plants. Some private energy companies are actively equipping their facilities with re­mote monitoring and diagnostics to improve reliability and reduce operating costs.

By 2030 the share of renewable sources in Russia will be 4.5%, the introduction of smart grids will reduce the need for in­stalled capacity by more than 10% (predictive value - 34 GW), will reduce energy consumption by almost 9%. The relative level of network losses can be reduced from 30 to 8% [Forecast of de­velopment, 2014].

We made an approximate forecast of reducing energy con­sumption in various sectors of Russian economy (table 5), where is the largest amount of electricity consumption [Balance, 2016]. As an example we have considered 5 industries. It should be noted that the predictive effect of 9% can be achieved under the most favorable conditions.

CONCLUSIONS

State considers the digitalization as a task the solution of which will allow the country to reach a new competitive level.

However, the achievement of the significant results will be possible only if it is ensured an integrated approach to the im­plementation of the modem paradigm of electric power industry development. Existing legal regulations are mainly of a strategic nature, so it is necessary to form a legal base stimulating the de­velopment of intelligent energetics, the positive effects of which are extremely varied for stakeholders.

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About the Authors

T. V. Hovalova
Financial University under the Government of the Russian Federation
Russian Federation

Assistant at the Department of management of Financial University under the Government of the Russian Federation. Research interests: strategy and management of development of the companies of electrical power branch, introduction of innovations in power industry, cross subsidizing.



S. S. Zholnerchik

Russian Federation

PhD in Economics, Associate Professor. Research interests: economy and management of electrical power branch, introduction of innovations in power industry, efficiency of the energy companies



Review

For citations:


Hovalova T.V., Zholnerchik S.S. The effects of the introduction of smart grids. Strategic decisions and risk management. 2018;(2):92-101. https://doi.org/10.17747/2078-8886-2018-2-92-101

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