Is Smart Grid Key to a Renewable Future?

By John Kelly and Brian Bunte

Nothing motivates innovators more than being told that something cannot be done. This is especially evident in the electricity supply and distribution utility sector. While some industry spokesmen issue dire warnings on the grid stability dangers – inherent in cases of high penetration by distributed renewable energy, other utilities are making the foundational changes necessary to embrace and thrive in the upcoming future. These foundational changes include aspects of system design, business economics, and the customer-supplier relationship. The advances in the German electricity system provide powerful insights into the changes that can both enable and encourage a sustainable transformation of the United States electricity supply and delivery system.

Distribution system operators in the US indicate that there are system design constraints that could limit the deployment of local solar and other clean power distributed energy resources (DER) to no more than 10 to 20% penetration level. But how did Germany overcome these seemingly insurmountable concerns regarding high penetration of local renewable power? While many scholars and experts debate the approach, Germany achieved a non-high head hydro penetration goal of 30%. A recent Underwriters Laboratory research study uncovers how they built the foundation for this accomplishment. The base for this transformation is a self-healing distribution system and a restructured electricity market, while the foundation includes an independent system operators (ISO) and distribution system operators (DSOs) that provide for and manage grid services.

These ISO and DSO foundational elements include distribution-level community and customer response in real-time to stabilize the grid during substantial changes in renewable power output or customer demand. This capability is enabled by self-healing distribution system and a real-time energy market platform. The Story of Germany’s experience is essentially one about balancing the grid and keeping it stable by enabling grid operators, renewable energy suppliers, and customers to work together to ensure grid stability.

These foundational elements enabled private sector innovation and investment that created a system wide network of virtual power plants (VPPs) correcting grid imbalances in seconds. There are now more than 30 active VPPs using artificial intelligence to control massive amounts of local generation and load in real-time. A solar eclipse in March of 2015 verified the ability of those VPPs to ensure grid stability even when 80% of the sunlight was blocked for about 3-hours. Overall German grid reliability continues to get better with increasing amounts of renewable generation.

Germany completely reimagined and redesigned a regulatory and operating model to create a competitive and price-responsive grid. This redesigned grid includes:

  1. Modernization of electricity distribution systems to embed automated smart switching and redundancy that provides for real-time self-healing distribution and two-way power flow capability.
  2. ISO markets that allow competitive long term bi-lateral contracting so that customers can choose their generation supplier while offering real-time hourly power-pools, which enable customers and generators to compete for mitigation of grid imbalances in real-time.
  3. Ancillary service payments to customers from the ISO and DSO including distribution level services for demand response, power quality services, and voltage support.
  4. Standards that enable optimization of this new electricity marketplace while also holding new private sector entrants accountable to rigorous performance criteria. For example, the European Union created EN 50160 to ensure consistent standards for power quality.

How did self-healing distribution build the foundation for renewable power?

Historically, the electricity system protection relied on fuses and switches that could only open to isolate a fault, while distribution systems were designed radially to only send power to customers. This practice served customers well for the last one hundred years. However, this design cannot support the integration of large amounts of local renewable and other DER. System operators are indicating that no more than 10 to 20% of DER can be supported by the current electricity system design.

Innovations in the electricity sector introduced a new self-healing distribution design that leverages smart switches, looping of circuits, and intelligent software platforms that replace the traditional fuses and analog technology. These self-healing platforms can be designed to accommodate 50% or more of DER integration into the distribution system. These self-healing systems also improve system reliability.

Why are performance standards important in these new competitive markets?

Regulators, investors, operators, and customers can benefit from the introduction of performance standards that enable optimization of this new electricity marketplace, while also holding new private sector entrants accountable to rigorous performance criteria. European Electricity Quality Standard EN 50160 establishes such kind of standards for Germany. On a more comprehensive and transformative scale, Green Business Certification, Inc. worked with industry leaders and stakeholders over the past eight years to create the Performance Excellence in Electricity Renewal (PEER) standard, a rigorous design and rating system for electricity generation and delivery systems. PEER provides stakeholders with a framework, roadmap, and verification scorecard for working together to build the foundation for a renewable, sustainable energy future. This includes:

  • A framework that enables cities and utilities to work together to create utility-size microgrids with nested private microgrids and resilient buildings
  • Specific distribution self-healing criteria and rating system
  • Specific resiliency criteria for helping cities, utilities, microgrids, and buildings to create improved operating models and building a business case for islanding of critical facilities
  • A comprehensive energy efficiency and environmental scorecard that holds projects accountable for other key performance metrics in addition to carbon including water consumption, SO2, NOx, local emissions, waste recycling, and power energy efficiency
  • A platform for customer engagement and contribution to accelerate investment in distributed generation and renewable power (i.e. DER)

Some are quick to attribute Germany’s success solely to feed-in tariffs, thus, missing the critical framework that was developed quietly over the past two decades through innovative leadership and policy. Stakeholders worldwide can learn and benefit from Germany’s achievements by looking deeper into the foundational steps that made these achievements possible. This included self-healing electricity systems, generation restructuring, real-time price response participation by customers, ancillary service payments to customers, and performance standards. To facilitate the inclusion of all the aforementioned innovative applications and views to the grid of the future, Green Business Certification, Inc. proposes the PEER standard as a working and enabling framework.

For a downloadable copy of the May 2017 eNewsletterwhich includes this article, please visit the IEEE Smart Grid Resource Center



j kelly

John Kelly worked with the Galvin Electricity Initiative and the US Green Building Council to research and develop utility and private sector microgrid prototypes and supporting standards over the last 10 years. Mr. Kelly has held leadership positions with Duke Engineering and Gas Technology Institute while co-founding and serving as a managing partner for the clean energy development companies, Endurant Energy and IPP Connect. He holds a B.S. in energy engineering and certificate in environmental engineering. He founded and served on the board of the non-profit Midwest Energy Efficiency Alliance ( and is board chairman for Local Energy Aggregation Networks (


brian bunte

Brian Bunte has 25 years’ experience in the electric power industry including 5 years' of research and support of demonstration projects focused on electricity system sustainability. He supported the development and implementation of the Performance Excellence in Electricity Renewal (PEER) performance standard. Prior to 2012, Brian was a senior manager in engineering and business operations for a major electrical power utility working at multiple corporate offices and generating stations. Mr. Bunte is a member of the IEEE Smart Grid Education committee and the IEEE 1547 Conformity Assessment Steering Committee – Accelerated Deployment Effort. He attended the University of Illinois in Champaign-Urbana at which he received a BS in Physics, a MS in Mechanical Engineering, and an MBA.

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