Grid congestion
Understanding Grid Congestion
Under ideal circumstances, energy use ebbs and flows throughout the day. These variations in energy use are somewhat predictable as people and industries follow a pattern. However, when the demand for electricity outstrips what the transmission grid can supply, overload puts stress on the grid. This overload puts stress on the grid, causing power outages and blackouts, and affecting the efficiency of key industrial sectors.
The Growing Importance of Efficient Energy Distribution in the Renewable Energy Transition
Governments and businesses are setting more stringent energy efficiency and net-zero targets to meet their voluntary and regulatory commitments. Incorporating renewable energy into the grid is an integral part of this green transition. The emphasis on increased use of renewable energy sources presents a challenge as companies avoid grid congestion while balancing sources of energy.
As we use more solar energy, wind turbines, and other renewables, the grid must adapt. Typically, grid systems are built around a legacy energy mix including coal and oil. The grid of the future must handle a variety of decentralised energy sources, distributed through local distribution grids.
Smart grid technologies, energy storage solutions, improved infrastructure, and grid upgrades, are vital for getting this balance right and improving congestion management. All of these factors need to be considered when evaluating new property or infrastructure developments, both for developers and investors.
Renewable Energy Distribution: Integrating Renewables, Grid Congestion and Balance of Supply
The integration of renewables presents its own challenges. The energy output of solar panels and wind turbines changes with the weather. This can mean that the grid has either too much, or too little energy, depending on weather conditions. While demand side aspects are also important, for example, the rise of on-site energy storage systems can help businesses to lower their energy needs, ultimately, the energy supply still needs to meet demand.When renewable energy generation is high, the grid can struggle to handle the extra power, especially when legacy power plants are still running. This can result in surplus power, which can also cause grid congestion. On the other hand, when renewable energy production drops, say, if there’s no wind or inadequate sunlight, the grid has to quickly introduce energy from other sources to ensure that demand can be met.
Grid Congestion and the Impact on Developers and Investors
Grid congestion is a significant risk for energy project developers and investors. When the grid cannot move electricity effectively, development costs can spiral, and projects grind to a halt. Developers and their investors need to consider the possible costs of grid congestion when they plan their projects, and have solutions ready should grid congestion occur.
In areas where grid congestion is likely, the shape, size and type of project developments can be limited. Developers can only work within the bounds of what energy will be available on site.
ESG factors, which include emissions and efficient energy management, are more important than ever. Governments and corporations, when considering tenders, are moving away from the MEAT (most economically advantageous tender) model, and towards the MAT model (most advantageous tender). Developers and Investors must ensure that their developments are not only profitable, but sustainable too. Managing grid congestion is therefore a fundamental part of the planning process.
Solutions to Grid Congestion
From deploying innovative new technologies, smarter grid management techniques, energy storage, establishing regulations and looking at market-based solutions, developers and investors have a range of tools they can use to solve grid congestion.
Energy infrastructure investment is a serious consideration when looking at how grid congestion can affect projects. The costs of grid upgrades, or of potential financial compensation paid to grid operators to obtain access to the grid, should be accounted for in project planning. Ultimately, these extra costs can lower profit margins and create doubts for investors, but being transparent, planning for grid congestion proactively and building the right relationships can save costs and secure investor support down the line.
Power Grid Modernisation: Implementing Smart Grid Technologies
In terms of solutions, it doesn’t get much bigger picture than modernising the entire power grid. Promoting the better integration of renewables and incorporating smart grid technologies remain the best long-term solution to grid congestion. Smart grid technologies are often powered by AI, and work to improve efficiency and reliability on the electricity grid congestion. They deploy advanced sensors, data analysis, and automated controls that react to information about the grid in real time. This allows grid operators to adjust the flow of electricity, make intelligent calculations, reduce operational costs, and avoid potential bottlenecks.
Demand response programs are a clear example of how smart grids can help with grid congestion. When demand for electricity is high, these programs encourage businesses to use less power. This reduces the load on the grid by shifting energy use to times when demand is lower. This method helps balance the grid and can prevent power outages caused by congestion.
Reducing Energy Consumption
An obvious but less well used solution is for developers to reduce their own energy use. Exposure to risk is alleviated significantly for developers who employ strategies for saving energy. Stakeholders should first evaluate their planned or existing energy use (there are numerous private providers that offer this service) and look for hotspots and easy wins to optimise energy use. It could be as simple as switching providers, or changing/upgrading aspects of their infrastructure.
Another approach is to collaborate with other stakeholders in your area to set up shared power networks, both virtual and physical. That way, excess energy is better distributed and that excess is not sent back to the grid, reducing the risk of grid congestion.
Explore the Energy Infrastructure Solutions Offered by Necron
At the heart of Necron’s real estate philosophy lies a commitment to imagination, determination, and unwavering respect for our partners and the planet. Our projects are not just buildings; they are thoughtfully designed spaces fit for the modern world that embody Swiss precision, excellence and reliability. This philosophy informs Necron’s Flevokust logistics hub.
Aptly named the ‘Gateway to Europe,’ Flevokust combines quality and sustainability, with solar panels fitted throughout and a BREEAM-excellent certification. It’s designed with multi-modal principles in mind so it has the flexibility, economy, ergonomics, and sustainability, to future-proof the site.
In the area of Flevoland, where Flevokust is situated, as of 2 July 2024 a subsidy is offered where electricity users can skip the offtake waiting list, and receive a grant of between €5000 up to €100,000 for support for grid congestion solutions against various criteria, particularly to stimulate solution partnerships. The subsidy is offered to those who take steps to control the energy consumption of their devices, store generated electricity, convert electricity into other forms of energy, consume less energy when the grid is overloaded, pool their grid connections, pool their contracts, or supply extra generated electricity to a large consumer. In a world where the challenges of grid congestion and renewable energy integration are on the rise, Flekovust offers a vision of the future of real estate design in line with regulatory and market signals.
Necron’s projects are the benchmark for sustainable building projects. Interested in investing in the future of sustainable real-estate and property development? Get in touch.
