Given the intermittent nature of renewables, balancing supply and demand will become even more critical and balancing is required throughout the tree structure of the electricity system. This is where smart grids come into play. Instead of being solely reliant on electricity coming from central power stations, end users and local players have the chance to generate and store their own power, whether it’s through roof-mounted solar panels, small-scale wind turbines, anaerobic digesters, or a host of other renewable and new energy devices. Yet this decentralisation of power generation also creates opportunities for smaller players and those with an eye to replicable smaller project investments too. Smart grids allow reserve sources of power – such as grid-scale batteries and EV batteries – to be accessed within a few milliseconds, helping to balance supply and demand That’s already requiring upgrades to the transmission and distribution systems, with infrastructure funds and institutional investors playing a role in bringing offshore wind power to the masses. Many of the sources of renewable energy are in areas at or towards the very edges of the power network. Renewable energy has turned that model on its head. That transmission network then fed into regional or local distribution networks, like the branches of a tree, which brought the electricity to the homes and businesses that needed it. In the past, power networks were structured like a tree, with electricity generated at centralised power stations, then fed their power out through a transmission network or ‘trunk’. One answer to this untenable situation is smart grids, which was acknowledged by the IEA’s Executive Director who said, “Higher investment in low-carbon energy technologies including renewables, energy efficiency and nuclear power – alongside an expansion of robust and smart electricity grids – can help us get out of today’s difficulties.” National Grid ESO spent £718 million in payments to balance the UK’s network, including paying energy companies to produce less electricity. The previous year saw a reduction in CO2 emissions, largely due to a drop in demand for electricity because of the Covid 19 pandemic. The IEA found that last year’s rise in demand for electricity of 6%, the largest in percentage terms since 2010, resulted in an increase in carbon dioxide emissions of 7%, a record high.

Smart power grids