Smart Grids are gaining more attention in the media these days, and even some people who are not working in related industries are becoming quite familiar with the term. What is a smart grid? What kinds of investments are necessary to create one and what will they be like in the future? Let’s take a closer look at smart grids today.
A smart grid is the next generation electrical grid which combines the existing power grid with ICT in order to exchange information on power generation and consumption both ways in real time while optimizing energy efficiency.
Power generation using fossil fuels has risk factors such as pollution and high fuel costs. The realization that we may not be provided with stable electrical power in the near future due to depleting resources became apparent around the turn of the century. The smart grid concept recently emerged as a trouble shooter around North America, creating its own market.
How are existing power grids comprised and what kinds of investments were being made in the past?
Composition of electrical grid
Electrical grids consist of generation facilities for power production, transmission/distribution facilities that delivers electricity, and consumer facilities which consume the produced electricity. So far, investments were focused on expanding power plants and optimizing transmission/distribution facilities in order to respond to the growing demand for electricity.
Some changes are needed, however, in order to reach the best efficiency with a smart grid. What’s important is to prioritize and record how much electricity is being consumed and predict how much will be consumed in the future based on this information. AMI (Advanced Metering Infrastructure) is a system specifically developed for this function.
Composition of AMI
Smart meter installed for the lead-in part of each consumer facility is networked to the final transformer. The smart meter data gathered at the data concentrator on the final transformer is integrated into the power company’s management system.
Communication between the smart meter and the data concentrator can be passed through power lines or even wirelessly. In other words, the communication does not require additional wiring.
There are some differences in communication methods and protocols around the world, however. In Europe, communication using electric wires is preferred. Standardization among a few protocols such as G3 PLC (Power Line Communication), Prime, OSGP (Open Smart Grid Protocol) is another trend in Europe, although there isn’t any single protocol designated as the standard yet.
On the other hand, North America prefers wireless communication and commonly uses GPRS (Generation Packet Radio Service) or RF (Radio Frequency) Mesh as their wireless network. And finally in Asia, they are trying to create their original standard protocol for domestic use especially in countries like Korea, China, and Japan.
International AMI market
The differences in AMI around the world stem from their configuration and communication environments as well as the prospects of the market in each country. The global market is growing rapidly to create an efficient next generation power grid, and the market scale is expected to reach $147 trillion by 2020.
Why is the AMI market growing so fast, then?
In Europe, there is a policy called the EU Mandate 2020 aiming to construct smart grids in EU member states. The bottom line of this policy is mandating these countries to replace at least 80% of all power meters with AMI by 2020. In order to create efficient grids, both individual countries and the union are taking aggressive measures to raise the market by introducing new policies.
Another reason for this is because they can implement additional functions each country needs through AMI. The additional functions are as followed.
Additional functions AMI enables
Now that we have covered the definition of a smart grid and AMI for best efficiency, let’s see what its future will be like.
Many countries are looking to standardize the way in which various data on gas, water, and heat from consumers is gathered and managed. Such a standard can reduce the necessary investment for infrastructure when the system expands from electricity to other sectors.
Smart grids are also expected to go beyond their original role of data processing, control, and management based on the pay-per-use system, and start communicating with ever-increasing consumer devices such as renewable energy generators, energy storage, and electric car chargers with smart meters installed on the devices.
Investments for AMI construction will be made not only for its basic functions such as gathering and analyzing power consumption data in real time then controlling the load or applying different rates based on the data, but also for networking with generation and storage devices for consumers.
With proper investments, it is expected to provide new services we have yet to imagine by connecting to integrated data infrastructures as well as devices.
LG CNS is preceding AMI projects in East Europe and the Middle-South America, and has provided 150,000 smart meters to KEPCO, the state-owned electricity company in Korea. We are planning to pioneer a global market for AMI with our accumulated experience.
Furthermore, LG CNS will develop a consumer service which integrates our original energy storage system, electric vehicle charger, and photovoltaic technologies.
We are also preparing to combine big data and AMI, so that massive data from AMI can be processed, analyzed, and predicted. The gathered data is then to be utilized through IoT and constitute supplementary services for consumers. I look forward to seeing LG CNS AMI services grow with the AMI market.
Written by Jongseok Lee, Department chief at LG CNS Smart Green Department