In an effort to achieve the Paris Agreement’s objective to keep the global temperature increase to below 2°C this century, more and more countries are shifting towards sustainable electricity.
This shift has been further supported by the recent price drop of the technologies used for renewable energy production. BNEF reports that the cost of energy globally for onshore wind and utility-scale solar is now $44 and $50/MWh (on a Levelized basis), compared to $100 and $300/MWh ten years ago.
This is the result of battery storage experiencing a global price drop among all technologies, crucial to address the variability of wind and solar power.
The global awareness around the consumption and production of energy drives the renewable market. By 2025, the renewable market is forecast to reach 2.15 trillion U.S. dollars.
Although green energy sources can meet the market demand, the challenge resides in the inconsistency of infrastructure operations.
As solar and wind energy tends to fluctuate, this means that consumers will need to become increasingly reliant on technology.
Wind farms, for instance, often produce a surplus of energy at night when consumer demand is low.
To conserve and better manage the surplus of energy, the renewable energy industry relies on smart grid technology.
A ‘smart grid’ includes a variety of operation and energy measures that function as an energy network.
This network is composed of transmission lines, transformers, and renewable energy resources.
The EU defines a smart grid as: “an electricity network that can cost-efficiently integrate the behaviour and actions of all users connected to it – generators, consumers and those that do both – in order to ensure economically efficient, sustainable power system with low losses and high levels of quality and security of supply and safety”.
While the data on the network can be processed in real-time, thanks to 5G adoption, big data enables energy suppliers to analyse performance and customer behaviour to optimize their energy consumption.
Smart grid technology is already demonstrating its essential role in fostering renewable energy.
In the first half of 2020, renewable electricity usage exceeded fossil fuel consumption for the first time ever, generating 40% of the EU-27’s electricity, whereas fossil fuels generated 34%.
As a rapidly evolving technology, smart grids offer a tangible chance to reduce the impact of climate change by managing renewable energy sources.
Smart Grids will play a key role in the shift from conventional and inefficient power systems to intelligent, sustainable energy consumption.