Smart Energy—Grid Integration and Value of Distributed Energy Systems

Smart Energy—Grid Integration and Value of Distributed Energy Systems

A distributed energy system (DES) refers to an integrated energy utilization system located on the user side. It is an energy cascading system designed to directly meet multiple user needs by combining electricity, heating, cooling, and related technologies so that each level of energy can deliver maximum value. Energy is produced through multiple channels and supplied through decentralized generation coordinated by the main power grid, enabling multi-channel supply and multi-level development. The core concept of distributed energy is, in essence, to “store energy among the people.”

A DES is not simply a traditional power generation system deployed on a smaller scale. Rather, it is a new type of energy production system built on technologies such as automatic control systems, advanced materials, and flexible manufacturing processes. It features low pollutant emissions, flexibility and convenience, high reliability, and high efficiency. Distributed energy systems have eight major characteristics: (1) diversified fuel sources; (2) miniaturized equipment and systems; (3) intelligent operation and control; (4) networked dispatch and management; (5) strong environmental performance; (6) high-efficiency cascading utilization, including combined heat and power (or cooling); (7) integrated energy supply systems; and (8) a shift in energy enterprises from production-oriented models to service-oriented ones. In a sense, distributed energy supply is a localized smart energy network. DES provides multiple social and economic benefits and represents an important direction in the evolution of global energy supply.

The United States, Japan, the European Union, and others have already made the development of distributed energy a major strategy for energy security, energy conservation, and energy-driven economic growth. Building on advanced distributed generation, the United States, Europe, and Japan have promoted smart grid development to provide a dynamic platform that allows various distributed energy sources to connect freely. Through intelligent control and management platforms, they also provide services such as energy saving, demand management, and cascading combined cooling, heating, and power. At the same time, they increase power and other energy supplies by making use of local conditions to develop small hydropower, biomass resources, renewable energy, and the clean recovery and reuse of various waste-based energy resources. The fact that the United States and Western Europe have largely stopped building large-scale power sources and major energy facilities reflects this trend: these user-end-oriented systems for cascading energy utilization, renewable energy, and comprehensive resource utilization are helping improve energy efficiency, reduce emissions, and optimize the energy mix.

In the European Union, the European Commission has launched the SAVE II program, an action plan to improve energy efficiency that includes many different efficiency measures aimed at promoting the development of distributed energy systems. The UK government has long implemented the Energy Efficiency Best Practice Programme (EEBPP) to encourage DES development. Over the past 20 years, the UK has installed more than 1,000 distributed energy systems across hotels, leisure centers, hospitals, comprehensive universities and colleges, horticultural facilities, airports, public buildings, commercial buildings, shopping malls, and other related sites.

The United States began advocating the development of distributed energy systems in 1978. Today, the U.S. Department of Energy’s Distributed Energy Resources program is working to develop the next generation of clean, efficient, reliable, and affordable distributed energy systems. At the same time, both distributed energy systems and the strong smart grid needed to support them are treated as core elements in implementing the U.S. new energy strategy.

In practice, this effort involves broad cooperation with energy equipment manufacturers, energy service providers, project developers, state governments, federal agencies, public-interest organizations, and end users. Together, they research and develop a range of advanced, on-site, small-scale, modular power generation and energy storage technologies and equipment for industrial, commercial, and residential applications. These technologies include advanced gas turbines, microturbines, internal combustion engines, fuel cells, thermally driven technologies, and energy storage technologies. Development is also underway in advanced materials, power electronics, hybrid systems, and communication and control systems.

The U.S. Department of Energy proposed a long-term goal for 2020: by making the greatest possible use of cost-effective distributed energy systems, the United States would turn its electric power production and transmission system into the cleanest, most efficient, and most reliable system in the world.

Japan, based on its own natural resource conditions, has actively developed renewable energy and has optimized research to determine island-mode operating solutions for distributed energy systems. Australia’s Commonwealth Scientific and Industrial Research Organisation is establishing a Clean Energy Center (CNC) in Newcastle to provide the latest research results and development facilities in energy, support more than 100 research groups, and showcase applications of new energy technologies.

China’s National Medium- and Long-Term Program for Science and Technology Development lists distributed energy supply technology as one of the four frontier energy technologies, alongside hydrogen energy and nuclear energy. Reforms in the power sector—such as the separation of government functions from enterprise functions, the full separation of power generation from transmission and distribution grids, and the establishment of competitive market mechanisms on the generation side—have laid a solid foundation for the development of distributed energy systems. At the same time, the National Energy Administration issued the Interim Measures for the Administration of Distributed Generation in 2013, and the State Grid Corporation of China issued the Notice on Service Management Rules for Distributed Power Grid Connection in 2014, moving the deployment and use of distributed energy in China into the implementation stage. It was projected that by 2020, installed distributed energy capacity in major cities nationwide would reach 50 million kW, achieving the initial industrialization of distributed energy equipment.

At present, China’s distributed energy supply systems are still in an early stage of development. Distributed energy faces many problems in grid connection, grid security, power supply quality, energy storage, and fuel supply. In particular, outdated power grids are not yet able to meet the needs of distributed energy development, which in turn highlights the indispensable role of the smart grid in DES. The core of the smart grid lies in building an intelligent, distributed management network with smart decision-making and adaptive regulation capabilities, supported by powerful and efficient energy storage technologies. Such a system provides a dynamic platform for the free integration of various distributed energy resources and an intelligent control and management platform for energy saving and demand-side management.

With the rapid development of wind power, solar photovoltaic generation, biomass power generation, and other energy-saving and environmentally friendly power sources—as well as other types of distributed generation, including biomass (agricultural biomass, forestry biomass, biogas, and waste), gas, natural gas, coalbed methane, waste gas, industrial waste heat, industrial waste pressure, geothermal energy, ocean energy, battery storage, fuel cells, and other green energy sources—the research and development of distributed energy systems and their network integration will become increasingly important.