Social Impacts of Smart Grids

The Future of Smart Grids and Energy Market Design

Wadim Strielkowski

• Publisher: Elsevier
• Year: 2019
• Print ISBN: 9780128177709
• eBook ISBN: 9780128177716
• Topic: Economics
• Subtopic: Economic Theory
• Index: Economics

Social Impacts of Smart Grids: The Future of Smart Grids and Energy Market Design explores the significant, unexplored societal consequences of our meteoric evolution towards intelligent, responsive and sustainable power generation and distribution systems—the so-called 'smart grid'. These consequences include new patterns of consumption behavior, systems planning under increasing uncertainty, and the ever- growing complexities involved. The work covers the historical impact of the transformation, examines the changing role of production and consumption behavior, articulates the principles and options for socially responsible smart grid power market design, and explores social acceptance of the smart grid.Where relevant, it examines adjacent literatures from P2P electricity markets, electric vehicles, smart homes and smart cities, and related 'internet of energy' developments. Finally, it provides insights into mitigating the likely social consequences of our integrated low-carbon energy future.- Evaluates the connections between the concept of sustainability and the social impacts of the smart grids- Analyzes emerging trends in smart grids connected with trends towards the sharing economy- Investigates environmental degradation awareness and environmental stewardship goals associated with smart grids- Explores how to mitigate social challenges with effective smart grid power market design- Integrates energy stewardship and social acceptance literatures into the discussion of the smart grid

Chapter 1

General introduction

Abstract

This chapter presents the whole idea that stands behind this book, explains its rationale and structure, lists the chapters and provides a short overview of their contents. The chapter explains why I decided to write this book and what my motivation was. It reflects some of my ideas on how technology changes our everyday lives and whether this process would lead to something meaningful. The chapter is intended to intrigue the potential reader and to capture her or his attention.

Keywords

Smart grids; social impacts; future development; energy market design

1.1 Introduction: the idea behind this book

For the most part of the 20th century, traditional energy grids were used to carry power from a few central generators to a large number of customers. However, with the growing complexity of the today’s globalized world, these traditional grids are going to gradually evolve into something that has gained a nickname of “smart grids.” According to the established concept, a smart grid employs two-way flows of electricity and information to create an automated energy delivery network. Modern smart grids are instantly aware where and to whom the electricity should be delivered and are capable of promptly reacting to the changes in demand and supply. With the pressure on the electricity grids intensifying due to the commitments for the low-carbon future made by governments in the majority of the Western countries, the future of electricity networks is likely to face a number of challenges, including the new patterns of consumption, planning under an increasing uncertainty, and overall growing complexity due to the large number of small independent devices connected to the network (a concept that is known as the “Internet of Energy” (IoE) that is a subset of a larger and complex concept of the “Internet of Things” (IoT)).

Nowadays, we live in the age of digitalization. Digital technologies surround us everywhere and even, to some extent, start steering and shaping up our lives and our sense of purpose and existence. Digitalization was created with a purpose of freeing our labor, giving us more time to be spent with our families and friends, or endorsing us in pursuing our hobbies. However, the ubiquitous digitalization is doing nothing else than taking humans into the world of illusions. The threat of World War III (WWIII) is probably no longer real, but the twits and Facebook feeds speculating on how, for example, United States and Russia got to the brink of another Cold War are there. Yet, these twits and posts are not real, they are mere illusions. One can say that we live in the world of illusions that draws from our fears. Digital technologies simply amplify our fears.

The best example of this is the modern approach to journalism and making news. Long gone are the days when the journalists travel to war zones to report on numerous conflicts civil wars and humanitarian disasters. Nowadays, journalists sit in the comfort of their homes and follow what the world leaders have to say on their Twitter and Facebook accounts.

I remember when the military conflict in Ukraine started several years ago. The news on both sides of the conflict describing the escalation of the conflict and then the movement and the advancements of the opposing forces used twits of field commanders as their credible source of information. Without even going to the field, attending a war zone, ducking under bullets, checking the sources, and verifying the information in person—all those things journalists had to do in the past—many modern-day journalists were simply writing their stories based on what this or that person wrote on her or his Facebook page or Twitter. Some of these stories were groundbreaking, claiming thousands of deceased, large battles won or lost, key figures of the conflict killed or imprisoned—all just based on someone’s twit or post. I call this approach to creating and reporting stories a “coach journalism.”

And this is not just about journalism or news for ordinary people. American president Donald Trump started something that is known as “Twitter diplomacy.” Millions of people everyday wake up and check Twitter just to see where the wind of the world politics is blowing. In Russia, the Ministry of Foreign Affairs had to react according to Mrs. Maria Zakharova, a spokeswoman, who is proficient in using social media. Mrs. Zakharova is the voice of Russian foreign politics responding to Mr. Trump’s twits and posts using her own twits, messages, and yet another posts.

Digitalization creates a world that is full of illusions. A plethora of information makes it difficult to tell right from wrong. Human brain cannot process all the information because it has a physical capacity that cannot be extended. We are limited by our physical constraints, while the artificial intelligence (AI), a set of machine-powered algorithms, is not. In the eyes of many people, AI is becoming another useful remedy for the information overload, something that digitalization used to be in the 1980s and 1990s.

In the mid-1990s, researchers and futurologists were preaching that information technologies (ITs) would become an important player and would make the lives of billions of people easier and in general would make people happier in the early 21st century. Now, already in the 21st century, we are dominated by the influence of the technology. However, people are still not happy, and our lives are not becoming easier but (what a paradox!) more complicated. Nowadays, most of us have troubles with time planning and are required and expected to perform under enormous stress. Back in the 1990s, we expected that our lives would become easier, but they became harder instead.

In the 19th century, people did not have much time to communicate with each other because the only possibility was the snail mail. Writing and posting a letter required stationery: ink, paper, envelope, and a stamp. In addition, it was necessary to visit a post office and often spend a considerable amount of time in the queue. Receiving a letter was a memorable event and we all had a habit of checking our mailboxes as frequently as we are now checking our smartphones for the signs of the new messages or e-mail.

In the 20th century, in addition to e-mail the humanity invented a telephone. However, the telephones on the most part of the 20th century were stationary and mostly installed at homes or existed in a form or public payphones across various locations. Quote often, one had to walk for miles to make a phone call. I remember how in my youth we used to call in to one of our friend’s apartment to leave a message with his parents about the whereabouts of the rest of the gang. Everyone searching for the rest of this buddies within a big city would call the designated apartment and obtain the information about where to go. We also used a public payphone nearby to regularly check on whether anyone called and asked about our location—in order to do that, one of us had to take a walk for 15 minutes, call the designated apartment, and then walk back to report to the rest of us.

Nowadays, we write hundreds of messages, short notes, and letters everyday and send them through various messengers, e-mail, social media, or other applications. The result of this is the increased time pressure, as well as piling amounts of tasks at work and personal life. All these is leading to the increased and tightened controls and imposes more stress upon us. It is very likely that the future is not going to be different because the most important features of humans and machines do not support each other very well.

It might be that the feelings of excitement and stress are a necessity of being a human. The ITs dominate our lives and manipulate our feelings over time. For those of us who remember receiving a real handwritten letter, the feeling cannot be compared to the feeling of receiving a letter via e-mail. And this is not because the letter sent by an e-mail is less important. This is because of the personal attachment and feeling we used to attribute to the real paper, the real envelope, and the real handwriting that can be easier associated with a real person one can picture while reading the letter in question.

Smart grids of the future will be heavily reliant upon ITs that would require efficient and quick Internet connection connecting all parts and corners of the world. However, many people are not ready to change their consumption behavior. There is a big difference do support something publicly and openly or put a “like” for something at one’s Facebook account or to actually stand up from one’s chair, step out of one’s apartment, go out and do something.

Dealing with smart grids of the future would require both understanding basic principles of cyber security and following the rules of personal behavior on the Internet. Internet or the worldwide web not only offers a lot of comfort in our everyday lives, but they also pose numerous threats most of us are unaware how to process or to handle.

This book is titled “Social Impacts of Smart Grids” with a subtitle “The Future of the Smart Grids and Energy Market Design,” which involves the prediction of how the smart grids and energy markets might evolve in the nearest future. When one is attempting to predict the future, there is always one simple but very substantial problem: most of predictions simply do not come true. The laws of the universe are very complicated and seem to be governed by the chaos theory rather than by some divine powers. Thence, any predictions usually omit very important factors that might change everything.

Take the story of smartphones, for example. The first smartphone on the market was the first model of iPhone which premiered in July 2007. Now, 11 years later, we are totally dependent on smartphones and cannot imagine our lives without them.

In 2006–2009 I worked as a Research Fellow at the School of Built Environment, University of Nottingham. My main responsibilities were to handle the EU Framework Programme 6 project entitled “Integrated e-Services for Advanced Access to heritage in Cultural Tourist Destinations” (project acronym ISAAC, project number FP6-IST-2006-035130) (Cordis, 2019).

ISAAC project was an interesting experience. I often traveled to Amsterdam, Leipzig, and Genoa. Especially, Amsterdam was very interesting and the most advanced European city in terms of electronic and digital services for tourists and residents. The City Hall and the seat of the Municipality of Amsterdam is located at the famous Stopera building complex that also houses Dutch National Opera and Ballet, the principal opera house in Amsterdam that is home of Dutch National Opera, Dutch National Ballet, and Holland Symfonia. Once, we had a project meeting in Saint Petersburg where our Russian partner at that time, Russian State Museum, had the St. Michael’s Castle (also known as “Mikhailovsky Castle” or “the Engineers’ Castle,” a place in which Emperor Paul I was assassinated in March 1801) closed for 3 days to the public for us to have our sessions undisturbed.

ISAAC project brought together researchers, ICT companies, city authorities, and cultural institutions from the five EU countries and Russia, including the Research Centre Karlsruhe, University of Nottingham, the University of Sunderland, Free University of Amsterdam, Russian State Museum, and world-famous Hermitage Museum. The project focused on a case study of three European cities—Amsterdam, Genoa, and Leipzig—pooling knowledge and experience in the fields of digital culture and heritage, e-tourism, cultural tourism management and urban e-governance (Chiabai et al., 2014).

ISAAC’s main objective was to enhance the relationship between digital heritage and cultural tourism by developing a novel user-centric information and communication environment providing tourism e-services for tourists and citizens in European cultural destinations, facilitating virtual access and stimulating learning experience of European cultural heritage assets before, during and after a real visit. ISAAC main output was the development of a novel user-centric information and communication technologies (ICTs) environment based on new e-services and the integration of existing e-services meeting the needs of all cultural stakeholders: citizens, tourists, and private and public entities.

ISAAC project lasted for 3 years between 2006 and 2009, and most of our visionary ideas that were shaped up during this time concerned personal computers. The first smartphone (the first model of iPhone) was introduced to the market in July 2007 and none of us had the gadget and could not envisage how it would change the tourist and resident experience in cultural cities worldwide.

The same might happen with the smart grids and the energy market of the future. The way we can imagine it would evolve and develop might be totally wrong due to many things. One of them is batteries. The batteries and charging devices we have today are very limiting devices that have lots of drawbacks.

Although water storage currently dominates the world’s conventional (electric energy storage, EES), rapid ongoing decreases in the cost of batteries raises hopes that batteries based on storing energy using chemical components and reactions chemical will offer a new and attractive storage option. For example, Newbery and Strbac (2016) summarize estimates for 2020 battery energy storage costs, which range from 253 to 345 EUR/kWh for the battery pack as opposed to the today’s costs of about 1117 EUR. Moreover, there is still no battery revolution for a future smarter energy system in sight despite the plethora of research focused on improving performance and reducing costs of battery storage across electrochemical, mechanical, and thermal devices. However, everything is not that simple as it seems. It is true that opposed to the existing batteries that draw from the chemical energy have short lifetimes and prove inviable under the current electricity prices (Staffell and Rustomji, 2016), the hydropower EES use the free storage medium (water) and can operate for more than 100 years. Nevertheless, their potential of gravitational energy is remarkable weak compared to chemical energy and their high capital costs and their distance from demand centers sometimes make them less favorable options then battery energy storage. Yet, a new battery storage device might come with a completely new technology and change the energy market from the grounds. However, we do not know whether it will appear tomorrow, in several years, or perhaps decades. The future is wrapped in the shadows just like the encounter of the electrification plan (called “GOERLO”) conducted in Soviet Russia and described in the Herbert George Wells’ book published in 1921 (Wells, 1921).

1.2 Book rationale and its structure

This book goes beyond the traditional analysis of the future of the smart grids by exploring their social impacts. It focuses in how the producers and consumers of energy on the traditional energy markers are giving their place to energy prosumers and how the society perceives these changes. It explores the raising popularity of the sharing economy concept and how it is used in smart grids. Furthermore, it tackles upon the social acceptance of smart grids based on the sustainability concepts and ideas and explores people’s attitude toward the issues of peer-to-peer electricity markets that are brought about by the recent developments and changes in transportation (electric vehicles), housing (smart homes), as well as energy generation and transmission (IoE).

Why I am writing about the social a...

Table of contents

• Cover image
• Title page
• Table of Contents
• Copyright
• Dedication
• Chapter 1. General introduction
• Chapter 2. Traditional power markets and an evolution to smart grids
• Chapter 3. Sustainability off the smart grids
• Chapter 4. Renewable energy sources, power markets, and smart grids
• Chapter 5. Peer-to-peer markets and sharing economy of the smart grids
• Chapter 6. Consumers, prosumers, and the smart grids
• Chapter 7. The role and perception of energy through the eyes of the society
• Chapter 8. Smart grids of tomorrow and the challenges for the future
• Chapter 9. Conclusions
• Index