Across Asia, companies and governments are adopting more renewable energy as concerns over climate change and carbon emissions move up the development agenda. The Asian Development Bank estimates that the share of renewables in electricity generation in the region will increase from 1.9 per cent in 2010 to 7.1 per cent in 2035.
As these new sources such as wind, solar and hydropower become part of the electrical grid, they also introduce instability as energy is produced only under certain weather conditions. Utility operators must therefore find a way to keep the grid stable, says Sven Wagner, Director, ConnectedEnergy at Bosch Software Innovations in a recent interview.
Smart grid software not only helps manage this variability by automatically shifting energy to where it is needed in the grid, it also enables consumers to use energy more efficiently, he says. The software uses smart meter data and sensors which measure and monitor electricity consumption, feed-in and flows within the grid, analyse the information and automatically execute decisions to optimise the grid’s operations.
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It does so by supporting the so-called demand response mechanism, which encourages households and companies to use more electricity when prices are lower or less when the system is less stable. Consumers get paid for reducing or shifting their power usage during times of peak demand or forced outages of power generation plants.
While the smart grid technology is not used on a large scale in Asia yet, the potential is immense, he adds. In countries that are investing heavily in renewable energy, such as China, smart grid technology can stabilise or integrate the new sources into the power grid easily.
“You also have regions which are not yet connected to the main grid or in a way that the capacity doesn’t meet demand, for example, in the autonomous regions,” he adds. “You build solar and storage, you can serve these remote regions independently.”
Smart grid software – a growing segment for Bosch
Bosch Software Innovations is a unit of Bosch which develops and markets Internet of Things (IoT) software, namely the Bosch IoT Suite. Bosch has roughly 360,000 employees worldwide and generated sales of 49 billion euros in 2014 while Bosch Software Innovations has about 600 staff based in Germany, the United States, Singapore and China.
The Bosch IoT Suite focuses on mobility, energy, manufacturing, and building automation, and allows devices and people to interact on a central IT platform. One of its fastest-growing segments is energy and smart grid software, says Wagner.
Virtual power plants
Swaroop Balakrishnan, regional sales director of Bosch Software Innovations, Asia Pacific, says renewable energy use is rising across the region and utilities will need to change the way they run their grids.
“That brings new dynamics into the equation,” he says. “In Singapore, Malaysia and Thailand, there are a lot of photovoltaics coming in. In China, it is hydropower, solar and wind whereas in Japan the focus is on more on hydropower and solar. There are a lot of wind turbines coming up also in the southern part of India. These are sources that need to be leveraged to get them into the grid as much as possible.”
As part of this transition, many consumers – from households to companies – are also becoming producers of energy and are feeding this energy into the grid, thanks to solar panels and small-scale hydropower projects such as tidal energy.
In other words, the traditional model of small number of centralised power plants powering a community is giving way to a more fragmented system of distributed generation, in which electricity is generated in many small-scale facilities.
To help grid operators manage this complex distribution system, Bosch Software Innovations has created a software solution called ‘Virtual Power Plant Manager’. It automatically manages loads, stabilises voltages, and guarantees supply by reading data and executing decisions to optimise operations.
Wagner notes that Asia can also adopt the demand response mechanism which Europe has used in recent years, to manage occasional demand spikes and drops in the grid. For example, corporate users that do not need central heating during the night when offices are empty will be paid for reducing their usage. This reduction in power consumptions is measured and priced upfront based on the amount of energy they had used in the past.
In Asia, the same concept can be applied to cooling, says Balakrishnan.
“A chiller consumes power to chill the water when the power rates are low, and when the water is sufficiently cool, it uses that cold water when the rates are higher to cool buildings. It’s like storage of energy,” Balakrishnan says.
Another use of smart grid technology is the storage of power. For example, if a microgrid is generating more energy from renewable sources than it is using, excess energy can be stored in batteries for later use.
“This solution can become very powerful in this region,” Balakrishnan says.
Smart Grids in Asia
Despite the obvious advantages, such solutions are not widely used in Asia yet, the Bosch executives say.
Australia, China and Japan already have respective regulations in place – but not for retail consumers yet – while Singapore is preparing the implementation of such a mechanism. Markets such as Indonesia and Malaysia though, still have “some way to go”, Balakrishnan says. But he believes that it is a matter of time before governments set up the regulatory framework for demand response there, too.
“Asia is very diverse so we have to focus on areas that are more ready and able,” he says. “Renewables are coming to Asia in a big way, and that is what’s going to drive regulators to act fast, to be able to manage that within the ecosystem. We are waiting for that to happen.”
This story was first published in Future Ready Singapore. Click here to subscribe to the newsletter.