Who’s ready for grid edge solutions?

A new report assesses the readiness and need for grid edge solutions in numerous countries and regions. Two of the authors discuss their key findings.

In a conventional energy system with large centralized generation assets, the “grid edge” refers to the interface between the grid and the end-consumer. Today, however, the scope of this term has broadened to encompass a broad range of connected technological components at the intersection of supply and demand that link the grid with the building, industry asset, or end-consumer. A new study, authored by a team of experts from TU Berlin and the Univerity of Oxford with support from Siemens, proposes a framework for identifying the key factors that influence the need and readiness for adoption of grid edge technologies in different locations. As such, it allows us to determine which regions stand to benefit the most from grid edge (where the need is highest), and which are most likely to be able to engage with grid edge (where readiness is highest). On the occasion of the study’s publication, we spoke to two of the authors.


Interview by Chris Findlay

Miriam Zachau Walker and Stephan Seim, you were both collaborators on the expert team that has written a new report about grid edge solution, entitled “Driving the Energy Revolution”. You are also both doctoral students. What drew you to this topic initially?


Miriam Zachau Walker (M.Z.W.): Renewable energy has the power to address two of the biggest issues that we’re facing – climate change and poverty. Grid edge solutions support decarbonization, but access to energy can also be a powerful and important force. By working on renewables, I have the possibility to work on either or both of those big problems. I studied materials science and engineering, but I’m quite interested in interdisciplinary issues such as policy. The best technical solution might not always be the best regarding ethics, the environment, or economic questions.


Stephan Seim (St.S.): Decarbonizing our economies is one of the greatest challenges we face globally in the next decades, so with my background in natural science and management, I was drawn to the topic of the clean energy transition. Working in that field is very rewarding and interesting. In order to enable a smooth and effective transition, I also consider the political side of things crucial: How do you regulate the energy system for efficient outcomes? How can you get society on board? To me, measuring grid edge readiness and needs is a proxy for the actual status of the clean energy transition in different countries.

What is the grid edge?

The grid edge is the interface of distributed energy supply and demand with the electricity grid. The solutions and technologies at that interface include all demand assets, distributed generation assets, and services that enable those technologies to work. Examples include distributed photovoltaic generation, buildings and smart building controls, smart meters, electric vehicles, battery storage, and many others.

How can grid edge solutions boost that transformational potential of renewables?


St.S.: Decarbonization and the shift to renewables pose a vast challenge to the energy system. Grid edge solutions introduce more systemic flexibility to compensate for the fluctuation of renewable energies. And this flexibility has to be controlled and supplied not just with grid edge technologies, but also through regulation and political frameworks that enable those technologies to work and ensure that their services are remunerated. We can expand that flexibility, for instance, with battery storage, or by making the demand side more flexible to shift load, or by reducing peak load for society. We also need to gain efficiency, and of course reduce energy consumption. But largely, grid edge solutions are about necessary interconnected technologies, distributed flexibility, and the efficient and secure control of these, enabling to integrate large shares of fluctuating renewables.

Renewable energy has the power to address two of the biggest issues that we’re facing – climate change and poverty. 
Miriam Zachau Walker, DPhil candidate at the Department of Engineering Science at the University of Oxford

The study that you co-authored has the subtitle “An Index for Grid Edge Need and Readiness”. How did you approach the subject? 


M.Z.W.: Our aim was to create an index to measure the grid edge in different locations. We broke that down into two dimensions by looking at the need for grid edge solutions, which is very much related to the need for flexibility, and by assessing the readiness to deploy or to scale up grid edge technologies. These two aspects were measured in terms of 99 indicators, applied to different locations and regions. So, rather than studying the need or readiness for a particular technology, we assessed the need for flexibility in grid edge solutions within a location, country, or region, and the readiness in that location to deploy or scale up a host of grid edge solutions. 

The interviewees

Miriam Zachau Walker is a DPhil candidate at the Department of Engineering Science at the University of Oxford. She is interested in the intersection of technology and policy to expand access to cleaner, more affordable energy. Her doctoral research focuses on understanding flexibility requirements of highly renewable power systems. 


Stephan Seim is a PhD candidate at the Department of Energy and Resource Management, Technische Universität Berlin. In his thesis, he engages in demand-side modelling using statistical and machine learning approaches – a foundation to evaluate the economic viability of grid edge solutions. Apart from that, he teaches bachelor and master students of civil engineering about some of the many aspects around the clean energy transition.

Who should read your study?


M.Z.W.: There’s value for both policymakers and private industry in assessing these regions. The public sector might look at which types of policies increase grid edge readiness or need, for example, by setting more ambitious climate or de-carbonization goals. Decision-makers could assess which policies have worked and learn from other locations that have a higher need or higher readiness. Readers from industry or the private sector can get information about locations of interest and the market opportunity there. Based on the final scores for relative grid edge need and readiness across regions, they can determine which ones merit further research and have a lot of potential, or can serve as examples of best practices.

What were the main takeaways?


M.Z.W.: Our conclusions focus mostly on policy levers for improving readiness and address needs. This can come either from improving existing installed renewables or from political commitments to decarbonize the economy and the energy system, and incentivize clean energy generally. We also recommend a robust, reliable, secure communications infrastructure to control these highly distributed assets, as the data collected by smart meters and other information needs to be transmitted securely for grid edge solutions to operate effectively. Finally, we recommend introducing flexibility markets or carbon markets, or both, so that electricity consumers can use their grid edge assets to participate in the electricity system.

How did you measure the need for grid edge solutions?


St.S.: We looked at two components – the current need for flexibility in the system, and the future need for grid edge solutions. The current need for flexibility is mainly determined by the share of renewables in the system and by the current potential for flexibility in the system, in terms of heat pumps, electric vehicles, etc. Regarding the future need for grid edge solutions, we included binding political targets of a country, based on the assumption that they should lead to a future amount of renewable energies or a future penetration of electric vehicles, for instance. Finally, we also identified the carbon market as an important factor in the future need and readiness for grid edge solutions, as it sets market signals and incentivizes the expansion of renewable energies or the de-carbonization of the economy.

Is it fair, then, to say that the need for grid edge solutions is the same as the need for flexibility?


St.S.: Yes, that’s how we operationalized the question. The need for grid edge technology is the need for current or future flexibility.


M.Z.W.: Flexibility can be provided by other things than grid edge solutions, but our thinking was that the reason why a place would need grid edge would be because it required flexibility, and renewables are a big driver of the need for flexibility. The index is based on proxies or metrics that inform that need. The reason you need grid edge solutions is to enable that flexibility, so the index is mostly driven by the need for flexibility because of decarbonization, but there are other reasons why a system would need to be flexible as well.

There’s no ‘German’ or ‘American’ atmosphere, only a global atmosphere. In fighting climate change, we need global cooperation.
Stephan Seim, PhD candidate at the Department of Energy and Resource Management, Technische Universität Berlin

The second parameter you measured was the readiness of a country or region to implement Grid edge technology.


M.Z.W.: That’s right. We broke it down into technical, political, economic, and social readiness. For each of those components, we determined the indicators that might influence them and how they should be weighted. That allowed us to compare not just the final readiness score, but specifically, which countries or regions are more technically ready or more economically ready or more socially ready to deploy grid edge technologies. For example, a location with a certain existing base level of these grid edge solutions or the markets for them is more ready to scale that up, because we already know that it works there and consumers are willing and able to engage with it. There are many different aspects involved here. Building controls are a huge part of grid edge solutions, as are smart meters providing the information that can enable many other elements. Electric vehicles can be used either for additional demand, or the battery in the vehicle itself can be used as a bi-directional vehicle-to-grid storage asset. Distributed generation, mostly in the form of solar photovoltaics, is another very important grid edge technology. 

If the need for grid edge is correlated to a need for flexibility, is readiness for grid edge technology broadly the same as readiness for the energy transition?


M.Z.W.: Technical grid edge readiness focuses mostly on the electricity infrastructure, and while the energy transition might happen through electrification, there could be other energy vectors than mass electrification such as hydrogen or ammonia, for example. So I hesitate to say that readiness for grid edge means that you were particularly ready for the energy transition, though if you’re more ready for grid edge, you might be more ready than other countries for the energy transition, relatively speaking. Stephan may disagree.


St.S.: No, but I do think grid edge readiness is a strong indicator of readiness for the energy transition. Some countries have high shares of biogas, which is renewable, but still pretty flexible, and might therefore not require as much readiness for grid edge solutions.

To what extent is the energy transition something that needs to be globally coordinated between many parties, and to what extent is it something that happens at different speeds and in different ways in different locations, depending on these parameters that you measured?


St.S.: There’s no ‘German’ or ‘American’ atmosphere, only a global atmosphere. In fighting climate change, we need global cooperation. The COP conferences and the Paris Climate Agreement are key for getting every country on board to fight climate change and decarbonize their economies in a coordinated way. But renewable energy sources are unevenly distributed. For example, California has a high solar potential compared to Finland, while Finland has great biomass potential, which, in turn, is very limited in Germany. Thus, because every country and region has a different potential pathway to achieving a clean energy transition and decarbonizing its economy, the overall effort to achieve targets should be on a global cooperative scale, but every country will have to find individual solutions. Notably, though, carbon pricing is a very effective universal instrument.

Looking at individual country cases, the UK for example has set strict decarbonization targets and built massive offshore wind generation capacity.


M.Z.W.: Yes, with even more wind capacity planned. Recently, they’ve increased the target from 30 to 40 gigawatts – an enormous share of wind power, considering that peak load here is in the mid-fifties gigawatts in winter. But despite the high political readiness in terms of our score, on other metrics, the UK hasn’t yet followed through with the enabling effect of the other things that are required. For example, its smart meter target has consistently been plagued by issues and delays, harming its ability to follow through on some of the grid edge specifics at the distribution network level, or even to just understand basic demand patterns or enable control of distributed assets. But yes, globally the UK is leading in ambition and in wind power, especially, and also has ambitions for some solar power. So it has the potential to achieve its net zero target and therefore has a relatively high need for grid edge technology. But significant progress needs to be made in order to ensure this happens at scale.

Our index can also be applied to regions, such as California, which exhibits the highest need for grid edge solutions.
Miriam Zachau Walker

Stephan, you’re based in Germany, which is seen as a global leader in energy policy, but the white paper notes that the country is falling short of its potential.


St.S.: Germany has been a forerunner in the energy transition. In recent years, though, it has lacked political ambition. For example, the coal phase-out won’t be completed until 2039, though market forces such as an effective carbon price might bring that about sooner. On the other hand, Germany has only recently adopted an actual net-zero target, which also affects its readiness. 

What are other countries doing better?


St.S.: While countries like Finland and Singapore have nearly 100 percent smart meter penetration, and are planning for the second generation, Germany is only beginning its smart meter rollout, which is an important prerequisite for using flexibility in the system. The government has also recently increased its very low carbon price to a starting price to €25 per tonne of carbon in 2021. This national carbon price comes in addition to the European trading system carbon price for industry in the energy sector. So, here too, Germany could be more ambitious. But having said that, our indicators show that Germany is still among the leading countries.

Aren’t there significant differences even at the sub-national level?


M.Z.W.: Our index can also be applied to regions, such as California, which exhibits the highest need for grid edge solutions. It’s quite high in readiness, partially due to high penetration of renewables, especially solar power. Even if some of that is aligned with demand during the day, it still requires a lot of flexibility. 

California has ambitious decarbonization targets, beyond those of the US as a whole, with policies fostering renewables and electric vehicles and other grid edge assets as well as markets to enable them. Also, the US has one of the least reliable electricity infrastructures among OECD countries, and California in particular has often had to preemptively shut off electricity supply due to natural disasters. Additional flexibility in the system could enable a more reliable grid and make disruptions both shorter and less frequent. 

Of the five regions you analyzed, Singapore stands out as needing less grid edge than the other four. Why is that?


M.Z.W.: Singapore is an extremely densely populated territory with a large commercial sector and comparatively few cars. Due to its very small land area, it has much less potential to generate its own renewables, especially wind or solar, and accordingly relies a lot on dispatchable generation, with discussions underway about interconnectors with other areas. So, whether they would bring renewable or conventionally generated electricity, flexibility might come from those interconnectors rather than the grid edge, resulting in lower need in Singapore than in some of the other focus regions.


Finland stands out with the highest readiness in all components – political, economic, social, and technological readiness – and scores pretty high throughout. 
Stephan Seim

However, your study suggests the most grid-edge-ready country is Finland. Why is that?


St.S.: Finland stands out with the highest readiness in all components – political, economic, social, and technological readiness – and scores pretty high throughout. It has quite a high carbon price, which drives both the future need and the readiness for grid edge solutions, as well as a reliable communication infrastructure for integrating and operating this technology. For its space heating, the country relies largely on biomass, which is of limited dispatchability, because the primary purpose is to generate heat, with electricity being a by-product of combined heat and power plants.

Which policies have the biggest impact on accelerating the energy transition, especially from the perspective of grid edge and its potential?


M.Z.W.: We looked at policy levers and their potential outcomes rather than advocating for specific policies. We found three key areas to focus on: further encouraging clean energy, introducing flexibility and carbon markets, and ensuring reliable and secure communications infrastructure. But we were intentionally agnostic as to the form a policy might take – whether it is a subsidy, or a tax, or an incentive. That’s because due to political, societal, or economic factors, in some places a tax might work better, while in others, the best choice may be a funding stream that people can apply to, or regulations, or standards. So, we tried to not specify that, but we did specify what the outcomes of those policies should be.


St.S.: You’re absolutely right, Miriam, I just wanted to add that our index showed carbon pricing, which has been implemented in many countries, has a very distinct effect on both the need and the readiness for grid edge, because it incentivizes decarbonizing the economy. And that might bring about renewable energy sources as well as sources for flexibility, which can use this renewable energy. Ultimately, targets are good and important and necessary, but you also need the policies to meet those targets, and some countries have fallen short there. What we need is global, cooperative burden-sharing, which also means that richer countries might have to bear some of the burden for less affluent countries in order to decarbonize their economies.

November 25, 2020

Author: Chris Findlay is a journalist based in Zurich, Switzerland. He writes about new developments in business and technology, among other topics.

Picture credits: Siemens AG

women looking at her laptop and city at night

White paper: "Driving the energy revolution"

Grid edge technologies are an essential tool in the transformation of global energy – facilitating the adoption of renewables, turning consumers to prosumers, and mitigating climate change. Many factors influence which solutions are appropriate for a region, or how ready they are to deploy them at scale.

This white paper defines a powerful index to assess the relative need and readiness for grid edge solutions, so that barriers and opportunities can be identified and so that the grid edge revolution can be accelerated.

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