Smart Grids Roadmap - Smart Grid Sherpa

Interpreting results and furtheranalysisThe regional results provide guidance for the typesof pathways that each region might follow as theydevelop smart grids. China has the opportunityto deploy smart grid technologies to better planand design the new infrastructure that is beingbuilt, thereby reducing the negative impacts onpeak demand from the deployment of EVs/PHEVs.OECD Europe and OECD Pacific 18 demonstratesimilar trends with respect to all drivers, but OECDEurope shows the highest peak demand of theOECD regions considered. OECD Europe also mustmanage deployment within an older infrastructurebase and with higher deployments of variablegeneration technology. OECD North America canbenefit significantly from the deployment of smartgrids, given that it is the largest electricity marketin the world and has an ageing infrastructure,especially at the transmission level. A NorthAmerican smart grid pathway might thereforefocus on the benefits of demand response andtransmission system monitoring and management.This roadmap provides some insights into thebenefits and possible regional pathways for smartgrids deployment, but more analysis is needed,particularly of the generation side, to provide amore complete picture of system performance.Additional regional examination is also neededto consider specific system attributes. Majorcharacteristics of developing countries were notconsidered in this modelling, and should be addedto provide insights into developing regions.Smart grid CO 2emissionsreduction estimates to 2050Although electricity consumption only represents17% of final energy use today, it leads to 40% ofglobal CO 2emissions, largely because almost 70%of electricity is produced from fossil fuels (IEA,2010). In the ETP BLUE Map Scenario, as a result ofdecarbonisation, electricity generation contributesonly 21% of global CO 2emissions, representingan annual reduction of over 20 Gt of CO 2by 2050.Smart grid technologies will be needed to enablethese emissions reductions. Direct reductions willoccur through feedback on energy usage, lower linelosses, accelerated deployment of energy efficiencyprogrammes, continuous commissioning of servicesector load, and energy savings due to peak loadmanagement. Indirect benefits arise from smartgrid support for the wider introduction of electricvehicles and variable renewable generation.Taking these direct and indirect emissionsreductions into account, the ETP BLUE MapScenario estimates that smart grids offer thepotential to achieve net annual emissionsreductions of 0.7 Gt to 2.1 Gt of CO 2by 2050(Figure 13). 19 North America shows the highestpotential for CO 2emissions reduction in the OECD,while China has highest potential among non-OECD member countries.Estimating smart gridinvestment costs andoperating savingsA high-level cost/benefit analysis is vital for thedeployment of smart grids. Work carried out so farin the roadmap process is providing the foundationfor such an analysis, but more effort is needed asadditional data and modelling become available.The cost discussion needs to include the threemain electricity stakeholders: utilities, consumersand society.Utilities will experience both costs and savingsin the deployment of smart grids, in the areas ofoperating and capital expenditure. The deploymentof new generation (such as variable generation)and end-use technologies (such as electricvehicles) could increase the need for investmentin infrastructure, therefore raising capitalexpenditures; but smart grids have the potential toreduce peak demand, better manage generationfrom both variable and dispatchable sources,and therefore reduce the potential increases inconventional infrastructure costs. Operating savingscan come from decreased costs for maintenance,metering and billing, and fuel savings throughincreased efficiencies and other areas.Electricity production costs fluctuate accordingto basic supply and demand conditions in themarket, generation variability (such as unplannedoutages), system congestion and the prices of18 Although OECD Pacific is modelled as a single region, itscountries are not highly interconnected; further analysis must becarried out to determine how this will affect the areas of concerndemonstrated in the model.19 The methodology for calculating the emissions reductionbenefits requires further refinement but this provides anindication of the potential reductions.Vision for smart grid deployment to 205027© OECD/IEA, 2010