There is an urgent need to re-design our energy grid to take better advantage of all that digital has to offer. A recent paper describes how we can add a digital layer to existing infrastructure and use this digital energy grid to unlock greater efficiencies. But in order to realise this goal we will need a shift in our regulatory mindset.

This is a link-enhanced version of an article that first appeared in the Mint. You can read the original here.

We have gotten so accustomed to the near-universal availability of electricity that we barely spare a thought for the infrastructure behind it. Generating stations dotted across the length and breadth of India produce power that is fed into an electricity grid, which carries it to our homes and offices. The entire system works so reliably that we have come to assume there will always be a socket on the wall to charge our phone from, no matter where we are in the country.

Century Old Design

The core design of our energy ecosystem hasn’t changed in over a century. Whenever new technologies and systems became available, they were bolted on, like patchwork, without altering the way the system works. Since much of our energy infrastructure was built in a pre-digital era, we still have to physically verify various contractual obligations and performance metrics. New solutions designed for specific aspects of the energy ecosystem, such as charging networks for electric vehicles (EVs), have not been integrated into the grid despite the fact that doing so will improve its overall efficiency. And our laws, written a long time ago, come in the way of integrating small distributed energy generation systems into the grid.

While we have muddled along despite these shortcomings, of late, all this has started to come apart at the seams. With fast-rising demand for cooling systems, EVs and data centres, there is an urgent need to increase energy supply. We will go a long way towards meeting this demand if we integrate distributed and renewable sources of energy into the grid, except that our energy infrastructure is not designed to deal with variable sources of energy supply.

We need to redesign our energy ecosystem to align it with our current and future needs. But what exactly we need to do and the precise shape it will take is not yet clear.

Digital Energy Grid

A recent paper published jointly by the International Energy Agency and FIDE proposes a novel approach. Rather than overhauling existing systems and installing new equipment, it recommends implementing an open, interoperable protocol for energy that will unify various elements of the energy ecosystem so they can communicate more efficiently with one another. This will allow us to take better advantage of distributed sources of energy and unlock greater efficiencies in our existing system.

The design of this Digital Energy Grid (DEG) comprises three basic elements: identity, data formats and verifiable data portability. First, every entity in the energy ecosystem—be it a power plant, the national transmission grid, a commercial battery farm or a rooftop panel—will be assigned a globally unique identity. The data these entities produce will be associated with this identity and expressed in a standard, machine-readable format that can be digitally processed. A set of robust verification procedures will be put in place to ensure that all data is both portable across the ecosystem and cryptographically tamper-evident. Once overlaid on our current energy ecosystem, these three elements will work together to transform our siloed energy systems into an efficient “network of networks.”

Think of it like an internet for energy systems. Just as HTTP allows websites that incorporate different image formats and other digital artefacts to be accessed by anyone with a browser, the DEG would offer a unifying framework that connects energy devices and systems, regardless of their design and manufacturing origins.

Deployed at scale, it will allow a range of different participants to share information directly with each other instead of through a control centre. This will transform a system designed for one-way (top-down) flows to one that is more flexible and bi-directional. This, it is hoped, will open up new opportunities for innovation and efficiency. Apart from enabling real-time balancing of supply and demand and ensuring that the ecosystem can better withstand disruptions, it will offer new market opportunities and make it easier to effectively coordinate thousands—and eventually millions—of distributed resources.

Change the Mindset

The rewards could be significant. Neighbourhoods could use this new architecture to make themselves self-sufficient. They could keep their EVs and other devices charging when prices are low and offer their batteries as stores of available energy when demand is high. They could form micro-networks that make the grid more fault-tolerant by offering nodes capable of taking up the load if others fail. As we make the shift to distributed sources of renewable technology (like rooftop solar), this will allow us to better coordinate the production and consumption of energy, making it possible for us to stabilize the grid more effectively.

None of this will be possible without a change in the country’s regulatory mindset. This calls for a dismantling of existing laws that limit the integration of small distributed energy generation systems and the enactment of amendments that allow a more interoperable approach. Since security and resilience have been built into the design of the DEG, we will not need to legislate for it but trust that the protocols will ensure compliance. Finally, since it is regulators that will decide how those protocols will be implemented, it will put them more directly in control. This will enable greater private-sector participation in the energy ecosystem while still ensuring competition and consumer protection.