The Decentralised Power Grid System (DPGS) encourages consumers to participate in energy efficiency and demand-side management programmes, reduces energy losses, and enhances energy security, affordability, and reliability.
Executive Summary
Decentralised Power Grid System (DPGS) plays a key role in clean energy transition by supporting low-carbon or renewable generation from distributed energy resources (DERs). DPGS facilitates multiple decentralised energy sources feed into the electricity grid. It can work both connected to or independent of the main grid to provide affordable power to the local communities, especially in remote rural areas.
DPGS encourages consumers to participate in energy efficiency and demand side management programs, reduces energy losses, and enhances energy security, affordability and reliability. Distributed Microgrids are smaller, locally controlled networks within the overarching DPGS, serving local communities by integrating sustainable RE sources and storage systems. DPGS is perceived as a viable solution for tackling climate change, supported by communities in meeting their local electricity needs. Its wider adoption can advance the phasing out of large GHG emitting units in favour of smaller RE and storage units, and accelerate grid decarbonisation.
Introduction
DPGS can operate both in islanded mode or tied-up with the main grid, allowing connections from DERs i.e. low-carbon or RE sources to supply power over shorter distances to local communities. DERs include wind, solar, micro hydel, geothermal, biomass, Combined Heat and Power (CHP) and battery energy storage systems. Tie-in controls with the main grid allows DPGS to draw power when DERs are not generating, and export power to the main grid when demand is high, in a bidirectional flow of electricity.
Centralised, fossil-based generation requires huge capital investments in electricity grids for bulk evacuation of power from coal and gas plants. It needs investments in infrastructure for generation (huge fossil fuel and nuclear power plants), transmission (long-distance HV towers and power lines), distribution (MV and LV substations, poles and power lines), supply (metering, communications and billing), and complex protection systems. DPGS is situated close to the load centres, which reduces impact of grid failure, encourages low carbon generation and cuts down transmission losses.
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How DPGS benefits Energy Transition?
Reliability: DPGS operates in close proximity to the load. It has the ability to export power to the main grid in a bidirectional flow of electricity during peak demand. In islanded mode, DPGS works independently by drawing power from DERs to maintain supply. When DERs are not available due to local constraints or weather conditions, the decentralised grid can draw power from the main grid to maintain electricity supply. Surplus renewable energy can be stored in battery storage systems for later use, to balance supply and demand, and regulate electricity price.
Sustainability: Local clean energy generation and consumption reduce transmission losses, improve energy efficiency, reduce GHG emissions and promote sustainability. They are also environment-friendly due to low-carbon generation and reduced transmission losses.
Economics: DPGS can boost the local economy by creating new job opportunities in clean energy installation, production, operation, maintenance and services. In many remote or rural locations, it is less expensive to install a DPGS or Microgrid, than to extend the main grid.
Self-sufficiency: DPGS reduces dependence on the main grid and promotes energy independence and resilience. Rural communities, off-grid settlements and marginalised areas can be better served by the clean and sustainable DPGS. This promotes energy equity and fair access to reliable and affordable power.
T&D loss reduction: In centralised systems, power travels over long distances through transmission and distribution lines, resulting in high energy losses. DPGS reduces T&D losses with DERs situated close to the point of consumption. This results in higher system efficiency and lesser energy wastage.
Risks and Challenges of DPGS implementation and operation
Technical Complexity: Managing DPGS with multiple connected DERs e.g. solar, wind, biomass, CHP, storage units, etc. can be more complex than managing a centralised system. Advanced communication, net-metering and control technologies, with unified standards, are needed for seamless DER integration, grid connections and operation of DPGS.
Cybersecurity Threats: The increased number of connected devices and automated systems in a decentralised power grid raises the risk of cyberattacks. Robust cybersecurity control measures have to be implemented with DPGS to protect the grid from potential threats.
Regulatory and Policy Barriers: Energy regulations and policies need to be reviewed to remove barriers in the adoption and operation of DERs and their integration with DPGS.
Upfront costs: The initial investment required for installing renewable energy sources, energy storage systems and decentralised grid can be higher, unless innovative policies are formulated for sustainable financing options.
Market Challenges: Scaling up DPGS to support demand flexibility and export power to the main grid when it is under stress, requires a suitable commercial framework which incentivises DPGS for its role in maintaining grid stability and decarbonisation.
Overcoming the Risks and Challenges of DPGS
Research and Development: Continued R&D in advanced communications, metering, control systems, analytics and cybersecurity can address the technical complexities.
Policy and Regulatory Reforms: Policies and regulations must support reforms to facilitate integration of DERs into the existing grid infrastructure, with incentives for energy storage systems. Practical and friendly policies on feed-in tariffs, net-metering, tax subsidies, grants and approval process for RE installations help.
Clean Energy Financing: Innovative financing strategies, e.g. community-based funding, public-private partnership (PPP) and energy-as-a-service models are helpful. Energy-as-a-service model let consumers pay for the services only when they consume energy from DPGS.
Public Awareness and Training: Public awareness and training ease the resistance to change, promote adoption of clean and RE systems, and encourage community participation in energy efficiency and demand side management. It also helps the community develop a sense of ownership in propagating the cause of DERs and DPGS, as a sustainable solution.
Smart Grid Technologies: Smart grid technologies increase efficiency and adaptability of DPGS. They improve monitoring of bidirectional energy flow using sensors, telemetry, control systems and data analytics. They also help DPGS to interact with the main grid in real-time, control energy distribution and balance supply and demand, thus reducing grid stress and maintain security and stability of supply.
Representative Case Studies of DPGS implementation
Hosahalli Village, Karnataka: Indian Institute of Science (IISc) Centre for Sustainable Technology implemented a biomass gasification-based decentralised power generation and distribution system in Hosahalli, Tumkur district, Karnataka. The village microgrid provides low-cost, reliable power to the village households, schools and healthcare facilities. The project has significantly improved the quality of life through reliable access to cheaper electricity, economic development through job creation and reduced reliance on fossil fuels.
Puducherry Smart Grid Project: POWERGRID implemented a smart grid pilot project in Puducherry. This project integrated renewable energy sources – solar and wind, with advanced monitoring, automation, and control technologies, to provide power via a microgrid system. The project demonstrated successful integration of RE sources to deliver low-carbon, reliable power, in a sustainable way.
Stone Edge Farm Estate, California: Stone Edge Farm Estate implemented a Microgrid project with battery energy storage system (BESS) to enhance energy resilience and sustainability. With a 500 KW solar panel and a 1.2 MWh battery energy storage system connected to the local microgrid, it enabled load shifting and peak shaving of demand. This resulted in improved grid reliability, reduced electricity cost and levelled energy demand.
Driving factors for successful DPGS implementation
Stakeholder Engagement: Involve all relevant stakeholders from utility operations, planning, HR, finance and external collaborators for DPGS project alignment.
Business Case: Implementation model can vary subject to resources, geography, geopolitics, markets and local policies, so the business benefits, costs, and return on investment (ROI) must be clearly defined.
Regulatory Compliance: Ensure compliance with industry standards and regulations governing DPGS.
Scalability: Design the system so that it is scalable to accommodate future growth and additional functionalities.
Cyber Security: Implement robust cybersecurity measures to protect the system from cyberattacks.
Training: Provide training and support to the DPGS community to ensure effective utilisation of the system and adopting demand side management.
Review: Regularly review and optimise the system to enhance performance and efficiency, and address emerging challenges.
Conclusion
DPGS, backed by low-carbon or RE-based DERs, provide electricity closer to the point of use, reducing reliance on the main grid and improve reliability of supply through localised Microgrids. DPGS encourages clean energy transition, despite risks and challenges. The benefits of DPGS includes increased resiliency, sustainability, energy independence and economic development. The risks include financing issues. technical complexity, cybersecurity threats, regulatory barriers, and high initial costs. However, these challenges can be overcome by investing in research and development, updating policies, providing financial support, and raising public awareness.
K Ramakrishnan is an alumnus of IIT, Madras, IIM, Ahmedabad and NUS, Singapore. He served as the Executive Director of NTPC – India’s largest integrated power company, and also Rolls Royce and Siemens in Singapore. He is an expert on the power sector in India, and lives in Melbourne, Australia.
Soubhagya Parija is an MBA (Fin), Indiana University and HBAP, Harvard University. He has served as Chief Risk Officer at FirstEnergy, USA. Earlier he was the Chief Risk Officer at New York Power Authority. He has taught in Columbia University, New York, and served on the Board of Risk and Insurance Management Society (RIMS), USA.
Jayant Sinha is an Engineer, PGDBM, Accredited Management Teacher and Level 5 Certified Energy Professional. He has served both public and private sectors, offering engineering, consultancy and capacity building services in Smart grids, Power automation, Energy management and Sustainability in India, UK, EU, Americas and Middle East.