Smart electrification of end-use sectors benefits for distribution grids.

Abstract

This study aims to inform relevant stakeholders about the benefits that smart electrification strategies can bring to energy systems. The objective is to quantify these benefits for a distribution grid that serves electricity to a residential area. The analysis demonstrates how harnessing flexibility from distributed energy resources allow grids to be better prepared for a largely electrified future. This implies, on the one hand, the reduction of grid losses that are proportional to the electricity currents, and, on the other hand, the deferral of grid investments. These benefits require quantitative assessment to better assess such benefits for each context. The study assumes a largely electrified energy system. This implies the roll-out of heat pumps, electric vehicles (EVs), in addition to decentralised rooftop solar photovoltaics (PV). These assets, if integrated under a smart strategy, can help operate distribution systems in a more effective way. The study assesses a specific distribution grid that covers the energy needs of around 25 000 users and compares different smart electrification strategies. Results show that benefits, in terms of grid loss reductions and the use of grid lines, are maximised if all the flexibility is harnessed from all assets combined. The reduced use of lines consequently implies that investments in grid reinforcement can be delayed, and grid investments can even be avoided. Specifically, the minimisation of losses is estimated at 3% of the total energy delivered. Even more, smart electrification can reduce the use of lines by half and delay potential grid reinforcement needs. For the grid considered in this study, savings are estimated at around USD 13.3 (EUR 12 million), which is equivalent to USD 8.3 per megawatt hour (MWh) (EUR 7.5/MWh) delivered, assuming an investment lifetime of 40 years and a weighted average capital cost of 4%.