The energy sector is changing: Coal-fired power plants and nuclear reactors are giving way to wind turbines and solar panels to cover our future energy needs. What role will the Internet of Things play for electrical grid operators and consumers?

The energy sector is becoming greener. Whereas coal-fired and nuclear power plants used to be the primary sources of Germany’s electricity, thousands of wind turbines, biogas plants and solar parks are now producing energy between Kiel and Lake Constance. The share of renewable energy covering total electricity consumption continues to grow: In 2000, six percent of Germany’s electricity was generated from green sources, but by 2019 this figure had risen to 42 percent. This means the target for a successful transition to renewable energy according to the German government’s Renewable Energy Sources Act (EEG) has already been met: By 2025 more than 40 percent of the electricity consumed in Germany should come from green energy sources.

CONTROLLING SMART POWER GRIDS WITH DIGITAL SOLUTIONS

The increasing share of renewables means CO₂ emissions are decreasing. However, new challenges are also emerging for the energy markets, such as the management of decentralized plants, greater dependence on weather conditions and the reliable feeding and distribution of electricity into and from the power grid. Until now, such management has been quite simple: network operators only had to control a few power plants, making it easy to coordinate generation, consumption and storage. They always knew how much electricity each power plant would supply and when. In addition, plants could be switched off or started up depending on the current network load.

But the more decentralized the energy supply becomes, the more complex the control of the grid becomes. Wind turbines only supply electricity when a breeze blows and solar parks only when the sun is shining. Today, thousands of decentralized energy generation units feed electricity into the network. In order to avoid overloading or underloading the grid, companies in the energy sector must be able to react at any time to start up or shut down plants. This is a task for the energy sector that can hardly be solved without digital support, especially since network operators simply do not have access to the many plants feeding in power.

HOW DO NETWORK OPERATORS OBTAIN ELECTRICITY CONSUMPTION DATA?

According to a recent Gartner study, in addition to decentralization, decarbonization and democratization, digitalization and especially the Internet of Things (IoT) will be a central element in changing power supply structures in order to expand renewable energy. The introduction of intelligent electricity meters (smart meters) coupled with IoT solutions will help network operators obtain real-time information on the status of smart grids. To do this, electricity producers, whether private households or energy service providers, must send their data via local IoT devices.

This data from fixed and mobile networks is then evaluated and consolidated by artificial intelligence (AI) in a central, cloud-based IoT platform. Smart grids can be controlled automatically with this kind of data and fluctuations in the power grid can be absorbed by intelligent energy management systems. The AI can also quickly detect grid bottlenecks or potential overloading with such data. Moreover, it simplifies maintenance work on systems. For example, intelligent sensors on wind turbines can monitor the motor status and send an alert promptly when a reading is not within the normal range.

The Internet of Things doesn’t just allow you to control and optimize current networks. The newly acquired data also creates innovative business models. For example, electricity traders could sell surplus electricity to e-car owners, effectively turning vehicle batteries into energy storage devices.

Further information on the Gartner study can be found here.