The global narrative on energy is rapidly evolving towards green, sustainable solutions. Central to this narrative is the concept of a “green grid”—a modernized, intelligent electric power grid capable of integrating, managing, and distributing renewable energy efficiently.
A modernized grid facilitates the efficient distribution of energy, ensuring that power generated from renewable sources reaches the areas where it's needed. This is crucial for minimizing energy wastage, power fluctuations, and ensuring energy security. Currently, an outdated US grid leaves large quantities of renewable energy capacity untapped.
A smart grid integrates a diverse array of renewable energy sources leading to a more sustainable energy ecosystem. The technological advancements needed for this integration are challenging, and require substantial investments in research and development to manage the two-directional flow of electricity. [For more on smart grids see also the E&I article “The Role of AI and Robotics in the Renewable Energy Transition” (October/November 2023).]
Microgrids, Decentralization, and Resilience
Microgrids are localized energy grids that can operate autonomously from the traditional, centralized grid. They enable local energy generation, storage, and distribution, and provide enhanced resilience.
For instance, during natural disasters like hurricanes, which can disrupt the main grid, microgrids can detach and operate independently, ensuring continuous power supply to the local community. They can be powered by various energy sources, such as local renewables, batteries, or other small-scale, decentralized energy technologies. This enhanced grid resilience is vital in a world increasingly reliant on electricity.
Microgrids enable local energy generation, storage, and distribution, and provide enhanced resilience.
Sustainable Energy Futures in Germany
Germany and the USA, at different junctures in their energy transition journey, illustrate the challenges and opportunities inherent in this transformation.
Germany's Energiewende (energy transition) testifies to the nation's commitment to a sustainable energy future. The initiative encompasses a phased withdrawal from fossil fuels and nuclear power, alongside a robust expansion of renewable energy within the power sector. Germany has set ambitious targets for its Energiewende, aiming to derive 65% of its electricity from renewable sources by 2030. As of 2021, renewables accounted for 47% of Germany’s electricity production, with wind power being the largest contributor.
In addition, Germany aims to cut greenhouse gas emissions 65% by 2030 compared to 1990 levels and achieve net-zero emissions by 2045. Policies like the Renewable Energy Act (EEG), which provides incentives for renewable producers, and the Climate Action Program 2030, which outlines measures to meet the 2030 emissions target, support these goals.
The current German electricity grid system is wrestling with its management of the renewable power generated.
The linchpin to the success of this ambitious endeavor lies in the adequacy and modernization of the energy infrastructure. The current German electricity grid system is wrestling with its management of the renewable power generated—there are times when surplus electric wind power in the German northern coastal regions cannot be transferred to the southern industrial regions where the demand is high.
Policy shaping within the German parliamentary system to align energy and climate policy with practical implementation is complex. The natural gas delivery disruptions from Russia during the initial assault on Ukraine strengthened the political resolve for the energy transition. Nevertheless, the German government is challenged to balance its ambitious targets for renewable energy generation, emission reductions, and grid modernization with stakeholder interests, managing transition costs, citizens’ objections to constructing new national grid lines, and ensuring energy equity.
The Future in the USA
Across the Atlantic, the USA is navigating its energy transition at a different pace and scale. The USA has a diverse energy policy landscape with federal, state, and local regulations playing significant roles. The federal government sets the broader energy policy agenda, but states have a considerable amount of autonomy in implementing and advancing their energy policies.
For instance, California has been a front runner in setting ambitious renewable energy targets and promoting grid modernization initiatives. The state's commitment to achieving 100% clean electricity by 2045 testifies to the potential of state policy in driving the energy transition. So far, results are considerable (as of 2022): 54.2% of total energy was produced from non-GHG sources (solar: 17%; wind: 10.8%; large hydro: 9.24%; nuclear: 9.18%; geothermal: 4.67%; biomass: 2.15%; small hydro: 1.12%). Nevertheless, the consumer electricity price has risen sharply, California has one of the highest electricity prices in the nation: 19.65 cents/kWh (as of 2021).
The utility-owned microgrid cluster in Chicago's Bronzeville neighborhood demonstrates how microgrids can modernize energy infrastructure and contribute to community energy resilience and management in urban areas. Facilitated by ComEd and Siemens Grid Software US, the microgrid is capable of serving approximately 1,000 customers, ensuring that they have access to power even during extreme weather events or other disruptions to the main grid.
The microgrid cluster in Chicago's Bronzeville neighborhood is capable of serving approximately 1,000 customers, ensuring that they have access to power even during extreme weather events or other disruptions to the main grid.
It utilizes various energy sources, including a 500-kW solar PV installation, and is capable of islanding itself from the main grid during outages, providing continuous power supply to residents for four hours without its natural gas generation. The project not only enhances energy security but also provides a model for integrating renewable energy and optimizing grid performance through advanced grid management technologies. It demonstrates microgrids’ potential to provide reliable, affordable, and sustainable energy to communities around the world.
Investment Needs and Policy Framework
The transition towards a green grid necessitates large financial commitments. Worldwide, an estimated investment of $21 trillion until 2050 is needed to upgrade grids to meet net-zero targets, not counting the cost of new solar panels and wind turbines. The investment is not only about the physical hardware but extends to the software systems necessary for efficient grid management, research and development for new technologies, training of personnel, and public engagement to foster a culture of energy conservation and efficiency.
Worldwide, an estimated investment of $21 trillion until 2050 is needed to upgrade grids to meet net-zero targets.
The funding for these investments can come from a variety of sources including government subsidies, private investments, and international financial collaborations. A conducive policy and regulatory framework are imperative to foster innovation, incentivize green energy adoption, and facilitate the smooth transition towards a green grid.
International collaboration plays a pivotal role in accelerating the global energy transition. Sharing best practices, technological innovations, and financial resources across borders significantly enhances the pace and scale of the global transition towards a green grid. Some experts suggest only integrating national European power networks can deliver the potential benefits of achieving energy transition goals in Europe.
The Way Forward
Reflecting on the way forward, several key takeaways emerge:
Investment in technological advancements and grid modernization is essential for the efficient distribution and management of renewable energy.
Microgrids and decentralized energy systems enhance resilience and energy security.
The combination of micro- and smart grids promises a practical pathway toward achieving energy transition goals, as being implemented, for example, in Germany.
International collaboration, coupled with a conducive policy and regulatory framework, accelerates the global energy transition towards a sustainable, low-carbon future. Through a concerted effort among nations, industries, and individuals, the vision of a green grid powering a sustainable world is an attainable reality, heralding a new era of energy that is clean, green, and sustainable.
*Angelica Sirotin is a social impact venture entrepreneur, founder, and CEO of Sirotin Ventures. She is a member of the WEF AI Youth Council, B20 Indonesia 2022 Digitalization Taskforce, and has been selected as a SwissCognitive Global AI Ambassador 2022.