Visions of Tomorrow – Engineered Today

Microgeneration and the network as an energy storage entity

Posted on

Recent technological and political changes have brought battery-backed “family-sized” electric power generation closer to reality. What does this mean and where are we heading?    

The pressure to increase distributed renewable generation has mainly come from the general public, for whom the environment is of paramount importance. The Finnish Green Party was the first European Green party to be part of a national Cabinet in 1995. Today, many political parties share their visions.

International pressure and national decisions that support renewable energy generation and electric vehicles derive from global contracts and EU climate law. Keeping the political structure in mind, we can look at the applications, technical aspects and challenges from an economic perspective. The biggest challenges are not necessarily technical, as a simple political decision can lead to massive macroeconomic upheaval.

Electric cars as energy storage units

Currently, the most common forms of distributed power generation are different applications of photovoltaic solar power, wind power and bioelectricity production. The systems often use combined thermal and electric generation (CHP) and the technologies are well established, yet constantly evolving. There are also many other potential forms of distributed generation, varying in size from small-scale systems to concentrated grid-scale systems.

The electric car has been a complete game changer. The trend towards different electric vehicles like cars, ships, ferries etc. explains to an extent the explosive growth of different battery technologies. The total market for electrically chargeable vehicles in the EU expanded by 39% in 2017 and hybrid car sales increased by over 50%. The battery capacity of a 2018 Nissan Leaf is around 30 kWh. A household in a Western country consumes roughly 5000 kWh of electricity in a year, which is around 14 kWh a day. Battery prices are currently around 200$/kWh and are expected to drop below 100$/kWh by 2025. In contrast, battery cost was around 1000$/kWh in 2010.

By 2025, it is expected that:

  1. Small-scale electricity production will be on the increase
  2. A vast amount of electricity storage capacity will be available in the electricity network
  3. The battery price of a small electric car will be 30 kWh*100$/kWh = 3000$
  4. One will be able to cover the daily electricity consumption of an average household with a relatively cheap car battery

Substantial research is underway around the world to improve the economic and technical performance of storage options. In an electric power system, the benefits of storage systems are their potential to increase grid efficiency and reliability by optimising power flows and supporting the network. In March 2018, General Electric released their commercial grid scale 1,25 MW storage unit, which can hold 4 MWhs of energy (ca. 4 hours). The unit is modular, so the network operator can dimension the quantity of these units as needed.

“The trend towards different electric vehicles in part
explains to the explosive growth of battery technologies.”

The power balance 

The biggest problem in the public electricity network is maintaining the power balance. It is challenging because the timing of electricity production does not perfectly match consumption.

In most developed electricity markets, the price of electricity is often highest during daytime peak hours. Sometimes, the lack of power balance causes price spikes. For example, in the Nordic area the price of electricity can rise to 3000 €/MWh, if production cannot meet consumption. With that legally set maximum price, the average household would have to pay 42€ for its daily electricity.

The Nordic market also has a minimum electricity price: -500€/MWh, which means that the electricity producer actually incurs a cost to produce electricity for the public network. An example of the minimum price is Danish wind power. Windy conditions during low consumption hours of certain months can create the special conditions needed for the minimum price to come into effect.


Figure 1. On the first day of March 2018, a day hour could cost over five times more than a night hour. A better power balance would guarantee more balanced prices.

The smart grid

The smart grid is a concept where the electricity network participants digitally communicate in order to react to system balance changes (See Figure 2). The main benefit is the better upholding of the power balance for the grid owner. Consumers will, however, in the end also benefit from lower electricity prices.


Figure 2. A conceptual image of a Smart Grid.

At the lower level, we have smart building automation. Smart building automation includes applications like the smart control of lights, sun covers, temperature control, moisture control and pressure control. The idea is that an underfloor heating system can anticipate cold weather, buy cheap electricity or heating oil in advance, and store it in the household.

Communication between individual devices is commonly known as the Internet of Things (IoT). The building has learning algorithms to optimise the use of electricity and district heating. Fire and access control are common to industrial automation, but will soon be also adopted by household automation.  

Challenges in the new power system

A critical turning point seems to be at hand: batteries, decentralised production and smart grids are rapidly increasing. Political pressure to make fast decisions can suddenly lead to a situation where the decisions are made with less than optimal understanding of the technical and economic impacts.
The current network technology and electricity market structures need a revamp. The impacts will have to be studied as a whole to gain an understanding of the magnitude of the challenges.

From the perspective of electrical power system engineering, there are plenty of interesting challenges: the increasing short circuit current levels, changes in load losses, voltage profile changes, power quality problems, reliability issues, the new transmission network “bottlenecks” and compromised network protection. In addition, there is a more demanding problem that can compromise the network stability and control and, in the end, the whole use of network: the loss of synchronous use.

“If we reform electricity and energy markets, households
could sell their home-produced electricity to households abroad.”

Traditional power systems rely on conventional synchronous generators. The output power of these generators is fully controllable to satisfy the power demand at each time instant. Less known is the problem of low inertia caused by non-synchronous generation. In traditional networks, the rotating mass of a synchronous generator provides or absorbs kinetic energy in the network if there is an imbalance between electricity generation and demand.

Primary and secondary control measures (based on the operating speed and capacity determined by the grid operator) can increase or decrease the generated power to balance the changes in the grid frequency, but this does not happen instantaneously. In case of a sudden power imbalance, the large rotating shaft of a synchronous generator actually acts as the first responder; the change of frequency is limited by the inertia response of the system.


Figure 3. The duration of losing synchronous stability is very short. The loss of a large synchronous generator due to a network dynamic stability issue can lead to a larger blackout. (SOURCE : Power System Control and Stability, Dr Herwig Renner, Institute for Electrical Power Systems, Graz University of Technology)

Unfortunately, renewable energy sources are connected to the grid via power electronics, and unlike synchronous generators, they do not provide inertia to the grid. This means that a system with high renewable electricity generation becomes more unstable unless we provide it with some sort of support. One way to do this is the so-called synthetic inertia via power electronics.

The concept still needs comprehensive study, since without highly developed control and feedback; the synthetic inertia response will be slow and far from optimal. Sudden changes in the network frequency can cause serious challenges for conventional generator and turbine designs. Power plant relays can prevent the damage to a single plant, but can also cause cascaded trips in other plants and lead to a larger blackout.

How does decentralized production meet the demands of the power system stability and control in a larger network? There are solutions, but they can represent significant research and investment costs. For example, in the Finnish grid the repurchase value of the electric network is close to the value of the road network. The local grids are worth around 16 billion euros and the national grid 4 billion euros. The value of the electricity network alone is close to 8000 € per household, so any major decisions require thorough research.

Electricity markets and market structures

The level of detail in market system models, drastic changes in demand profiles, and production calculations cannot be determined as easily. The financial implications of electricity imbalance settlement start with the individual consumer.

The power system is divided into multiple levels of participants, each with their corresponding imbalance. Usually, the local network operator forms a local database that includes all consumption and production data in their area and the transmission line balance between neighbouring network operators.


Turbine in Hydroelectric Power Plant.

The operator delivers the data to an upper level correspondent and the chain continues until it eventually reaches the national grid operator. The national grid operator keeps track of the national balance and the balance between different neighbouring countries. The amount of data is often ragged all over the chain, and requires alteration before the financial transactions among the market participants are finalised.

In the process of determining the energy and power that each of the market participants has used or produced at different times, (often unique) databases are created. The size of these databases is expected to increase with small-scale production. The complexity of different electricity markets, from regional hourly electricity exchanges to future and forward exchanges, include peculiarities that have to be examined individually. Accurate analysis of the changes to market structures is challenging, until we see the wider international picture.

Could a household sell their “home-produced” electricity to a different household abroad? They could, if we invest in reforming electricity and energy markets.

Leave a Reply

Your email address will not be published.

Intelligent Engineering

Latest post


Green ammonia from Finland – a synergy of water, wind and land

Kirjoittanut By Jussi Ylinen

A derivative of green hydrogen produced from renewable energy, green ammonia has the potential to become a new source of energy and revenue for the Finnish national economy. It allows the country to break its...

Read more » Lue lisää »

Copyright © 2020 – Elomatic, All rights reserved