Category: Thought pieces

Aging electricity infrastructures, increasing energy demands and the need to make infrastructures smarter, reliable, efficient and more resilient prompted conversations and actions towards  modernizing the grid. This modernization involves the use of technologies that work in harmony to improve energy security.
Smart grids and the deployment of Distributed Energy Resources emerged as forms of disruptive technologies in the energy sector, encouraging decentralized power generation, and marking a slight shift from sole reliance on traditional power grids. Smart grids make energy systems smarter and Distributed Energy Resources help create a more local way to generate power. According to a January 2025 GII publication, the global market for smart energy estimated at $199.5 Billion in 2024, is projected to reach $330.6 Billion by 2030, signifying an increasingly rising adoption.

Understanding Smart grids

A smart grid is an electricity network that utilizes digital communication technology to monitor and manage the production, distribution, and consumption of electricity in real time. Smart grids make the whole energy system function like a team where energy users, devices, energy sources and power companies all work together to use electricity in the smartest way possible; minimizing costs, and maintaining the stability and reliability of the grid. Key features include:

• Two way communication system: Smart grids use technology to manage how electricity moves, using sensors, and communication (from the power grid to the consumer and from the consumer back to the grid) to make sure everything runs smoothly. Unlike the traditional power grid where electricity from power plant is sent to users in a one-way flow, smart meters and sensors collect and transmit data to utility operators and consumers, making sure that information flows both ways.
• Real time data monitoring and control of energy flows: Smart grids collect and analyze data in real time, leading to less wasted energy and fewer outages. For instance, a smart thermostat can adjust itself based on real time electricity prices or weather conditions.
• Automation for improved reliability and response times: With traditional power plants, if there is a problem like a blackout, someone or a team has to figure it out and fix it manually. Smart grids have made fixing problems easier with advanced grid protection systems, enabling utilities to see what’s happening across the system instantly and fix problems faster and automatically.
• Integration of renewables and Distributed Energy Resources: Smart grids are built to handle electricity coming from users, not just going to users. They use sensors and advanced technologies to integrate renewable energy into the existing infrastructure. Real-time monitoring helps manage variability and intermittency of renewables.

Benefits of Smart grids

• Enhanced reliability and fewer power outages: Smart grids can detect and isolate faults quickly, minimizing outages.
• Saves money: Smart grids can help lower electricity bill by enabling consumers to shift energy use to cheaper times through demand response programs. They offer real time information on real time pricing to consumers, which consumers can take advantage of to know when energy prices are really high in order to control usage.
• Efficient: Due to their ability to collect and analyze data in real time, smart grids automate the balance of supply and demand, helping to balance electricity flows and ensuring energy conservation.

What are Distributed Energy Resources?

Distributed Energy Resources (DERs) refer to power generation or storage technologies located close to where electricity is used. They are mostly small-scale. With DERs, instead of everyone getting their electricity from a big power plant far away, people and businesses can create and store their own electricity right where they are. DERs offer flexibility and resilience by operating in parallel with, or independently from the main grid to generate, store or even feed energy back into the grid. Examples include:

• Solar photovoltaic systems
• Wind turbines
• Battery energy storage systems
• Electric vehicles with vehicle-to-grid capabilities

Benefits of DERs

• Consumer empowerment: Consumers gain some level of control with the use of DERs. They can become prosumers (i.e. users who are both producers and consumers of energy at the same time)  by generating, storing, and selling electricity.
• Lower Bills: Utilities use net metering to calculate the total power generated by a consumer and subtract it from the total power used by the consumer. Consumers are credited for the amount of power they supply to the grid.
• Backup power: If the grid goes down or if there is a blackout, DERs can act as backup power.
• Reduced transmission losses: DERs are usually close to where people actually use electricity, thereby mitigating loss of energy associated with long-distance transmission.
• Less stress on the grid and better grid resilience: Instead of relying solely on the grid, DERs let regular people help power the world, thereby reducing the stress on the grid and enhancing grid resilience.
• Energy can be stored for later use: Battery storage systems store energy during periods of excess generation for later use at peak demand.

Smart grids and Distributed Energy Resources integration – how do they work together?

Smart grids coordinate DERs to maintain stability, even with fluctuating renewables inputs. They use advanced technologies and analytics to monitor DERs output, forecast energy production (especially for variable renewables), and balance supply and demand dynamically. Smart grids use sensors and digital tools to interact with DERs (like solar panels or batteries). If you have  solar panels on your house, your smart grid system can track how much electricity they are producing.

Drawbacks

Despite being promising, wide deployment of smart grids and DERs have been reportedly hindered by certain challenges such as; cybersecurity risks, privacy concerns, regulatory and policy issues, high implementation costs, market barriers, complex grid management, erratic power generation by most DERs etc. Hopefully, continuous innovation, and comprehensive policies and regulations will address these challenges in the near future.
Futuristic smart grids and DERs will probably be able to significantly alter the variability of renewables like wind and solar in order to make them fully reliable.

Conclusion

Decentralized energy systems in form of DERs are democratizing access to energy, paving ways for regular people to generate and control their own energy. This really underscores the importance of responsible technological advancements and innovations that encourage appropriate utilization of resources. These developments are even more crucial in places with dysfunctional traditional power grids, highly unstable power supply or where connection to the grid is unfeasible, considering the fundamental importance of energy in the world that we live in and in the day to day lives of people. As technology continues to evolve, smart energy innovations are expected to continue to shape the future of energy for better energy production and distribution. 

Overcoming energy poverty has been one of Africa’s greatest challenges. According to a world Bank report, as at February, 2017, Africa has more than 500 million people living without electricity. It is of no doubt that this lack of access to electricity affects all segments of the society; living conditions of citizens and residents are negatively affected, small businesses suffer due to lack of power etc. Therefore, improving Africa’s energy situation is central to the fight against extreme poverty.

For most African countries, developing the power sector was not a priority after gaining independence. However, in recent times, the lack of access to power directly influences Africa’s attempts at economic diversification. After years of not being a priority, energy policy is starting to move to centre-stage in Africa. Governments are adopting ambitious targets for power generation, backed in some cases by far-reaching reforms of their energy sectors. Private, domestic, and foreign investors, are also seizing new market opportunities.

The World Bank Group and the United Nations have committed to achieving universal access to electricity by 2030, this initiative has Africa at the centre of it. The Sustainable Development Goals (SDGs), adopted by the United Nations embrace the need for economic development that leaves no one behind and gives everyone a fair chance of leading a decent life. The seventh goal acknowledges the importance of “affordable, reliable, sustainable and modern energy for all”. In order to reach SDG7, Africa will need to electrify over 60 million people each year, more than double its current performance. The problem with this, is that the overall expansion of electrification in Africa has not kept pace with population growth in the same period, in sharp contrast to South Asia where electrification grew four times as fast as population. What this shows is that universal access by 2030 may not be achievable using just conventional energy means, Africa also needs to extend to unconventional means.